Despite being a late entrant to the wrap race, winning assets from existing players can make Zurich’s much-delayed platform a success, according to its UK chief executive Gary Shaughnessy.
Although wraps have typically targeted traditional life companies in their efforts to build business, Shaughnessy (pictured) is backing the advent of platform-to-platform re-registration to allow Zurich to gain assets from rivals.
It is a bold strategy, but Zurich has a lot of catching up to do in the platform market: while rival life companies Standard Life and AXA have well-established wraps and Aegon more recently launched its Novia-backed platform, Zurich’s FNZ-built proposition is yet to get off the ground.
The Zurich Intermediary Platform has suffered a series of delays. Having originally been scheduled to launch at the end of 2011 and then in March this year, it is now expected to come to market by the end of 2012.
However, Shaughnessy is confident any lost ground can be more than made up through re-registration.
‘Platform-to-platform re-registration makes it easier for advisers to move assets, and that is going to keep us all on our mettle. If platforms don’t deliver, the assets will move away rapidly,’ he said. ‘In our case, not having any assets and launching now is an advantage as we haven’t got assets that might move across.
‘The feedback we’re getting from advisers is there are a lot of assets on different platforms, which advisers are looking to move, and we’re getting positive feedback about the demand for our platform going forward.’
While Zurich may be behind the wrap curve, Shaughnessy should know a thing or two about the platform market, having been UK managing director of Fidelity, parent of FundsNetwork.
However, he is keen to stress the differences between Zurich’s wrap and Fidelity’s fund supermarket.
‘It wasn’t a case of whatever we did at Fidelity, I should replicate at Zurich because they’re different propositions,’ he said.
‘The Zurich platform is a wrap, it’s mentally grown out of being a support for holistic financial planning as opposed to being a supermarket that was grown out of support for individual product transactions.
‘We want to encourage advisers to put all the clients’ assets on the platform rather than just individual product transactions, and [they will] get savings if more of the assets are put on at the same time, hence the tiered structure of the Zurich platform,’ he said.
Making the platform a success is not the only challenge Shaughnessy has faced at Zurich since joining in June.
Despite being at the life company for just over six months, he has already led a restructuring of the business that resulted in the announcement of 200 job cuts in September.
He said the cuts were tough but necessary for the company to remain financially strong in the future.
‘We recognise that being efficient and having a sustainable cost base is crucial,’ he said.
‘We’re going through an enormous change,’ he said. ‘Almost every part of the industry is being changed as part of regulation.
‘The chances that everything that has been thrown up in the air at the same time will land exactly in the order the regulator thinks they will land are very low indeed.
‘A key test for us over the next year is how we effectively deal with unintended consequences. If we go back through another six-year process that costs the industry a lot of money, ultimately for the consumer, that’s bad. We need to work with the regulator on new guidance and rules, so changes are made in a sensible way.’
Gary Shaughnessy CV
2012-present Zurich UK, chief executive
2008-2012 Fidelity International, UK managing director
2006-2008 Prudential UK, managing director of retail life and pensions
1999-2006 M&G Investments, chief executive
1998-1999 AXA Insurance, brand and marketing director
1993-1998 AA Insurance and Financial Services, general manager of marketing