18 Years a Slave

Free at Last – Fees at Last

This month H.J.Scott & Co. proudly celebrates 10 years of freedom. Freedom for us as a business and freedom for our clients. The 1st June 2005 was D-Day. Like all things the UK financial regulator does, it was “bigged up”. D-Day stood for Depolarisation Day. It wasn’t a great idea and the execution didn’t deliver on the promises. But it made us think and we decided to draw a line in the sand.

We went fee only as a business. We turned our back on commission. Never again would we accept payment for the advice we give to our clients, from the insurance companies that provided the products. We assumed many businesses would do the same. They didn’t. They preferred to remain in the murky, back-hand world that kept them alive. They were commission junkies, needing their monthly fix from the insurance company pushers.

We were told we would go under and be forced back to the nasty old ways within months. The IFA who offered that prophesy ceased to trade 5 years later.

A Brave New World

There were no insurance companies who offered the option to cancel commissions in a simple way. Instead commissions were rebated back into products and clients received a higher allocation of units. Could we see this in practice. No. We were told to trust them. Seriously do I look like I was born yesterday.

With no help from traditional providers of products, new holders of savings were sought and we entered the brave new world of self-invested personal pensions, fund supermarkets and finally wrap platforms. Products with transparency. Where charges could be calculated and checked to ensure clients weren’t getting a raw deal. It all seems old hat today, but ten years ago there was no proof it would work.

Goodbye, Goodbye

Now fees weren’t for everyone. We had 1400 policyholders at that stage, we told the vast majority that if they wanted to know our fees going forward we would tell them if they asked. Very few did. We had secured our top 34 clients and had promised them the Earth. One by one we saw the rest of the policyholders where we knew paying fees would be better than being charged commission and gradually client numbers built up to around 100. We were looking after clients which collectively held £10,000,000 with us.

Everybody’s doin’ it

The Retail Distribution Review hit on 1st January 2013. Commission is now banned. Commission junkies are out of business, life companies are either reinventing themselves, dead or dying. The industry is becoming a profession slowly. We had an 8 year start on them.

Our bravery has paid off. Today we only look after 187 clients, but we manage over £53,000,000. That’s £53,000,000 more than we should have, if Insurance Companies had put their clients needs before their shareholders demands.

Raise a glass to the next 10 years. I don’t believe there will ever be much more than £50,000,000 that we manage. 200 clients is enough. My job now is to give my clients the confidence to spend and enjoy their life-savings.

11 Replies to “18 Years a Slave”

  1. I remember clearly the discussions we had ten years ago about your business model. I never doubted for a second that you would make it work well for your clients, and so it has proved. I look forward to the next ten years of change.

  2. There is a saying which goes…
    “Man is so made that when anything fires his soul, impossibilities dissapear”
    Congratulations and thankyou from a grateful client to a man (and a team) who’s souls were so ‘fired’ they acheived, to the benefit of us all ,what at the time everyone thought impossible, long may you keep on ‘blogging’

  3. Fantastic Howard! Glad you took my advice!! Haha
    Maureen & stewart

  4. Mr Scott

    Just read your blog and as always made me smile:)

    Really just wanted to say congrats on your move/escape from the theives and robbers, i called it smart at the time I seem to recall and like all great ideas now everyone thought of it first lol.

    Sod them all – power to your elbow!

    Cheers my friend:)


  5. Hi Howard

    I have just read your latest blog and I think it’s a great achievement !

    Over the years, you and your team have worked very hard to achieve this level of success – it’s a cocktail of making the right decisions, combined with following your aspirations and gut feelings, hard work and just (as you pointed out) sheer bravery !

    There is a saying that our lives are the result of the decisions we make, to some extent it’s true, I will always look back to 6 years ago when I had a choice between re-entering the metals industry or following an opportunity made possible by Yourself and Lesley.

    I wish I had been brave enough to follow my MBA instincts but instead I chose a dead end – but that’s life.

    Wishing you all the best


  6. Congrats Howard and all the team. Just made 60 .In New York,going onto Florida. Not possible,without your guidance. Lots of luck in the future young man. Utd Utd. Pete and Janet.

  7. Well done Howard
    I can’t thank you enough for the past 10 years,I hope I’m still here with you
    The next ten years,if not my son Jonathan certainly will.

    All the best Tom.

  8. Sterling work as ever Mr Scott, just don’t think of applying for Sepp Blatters job, they don’t employ people with ethics and morality.

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