Interview: John Deane, Chief Executive, Royal London

Published on Sunday 1 November 2009 19:18

WHEN he found out that his Scottish Life team had scooped the top prize at Scottish Financial Enterprise's "Innovators" Awards, John Deane wasn't decked out in his dinner jacket sipping fine wines like the rest of the competitors – he was enjoying a holiday with his family.

Deane, chief executive of parent group Royal London's intermediary division, splits his time between his office in Edinburgh and the family home in the West Country, from where he was told about Scottish Life's success at the Innovators, of which The Scotsman is the media partner.

The pensions and insurance firm scooped the "customer focus" award for its "income release" product – which allows clients to access their pension pots before they retire – before walking away as the overall winner of the competition.

Scottish Life beat off strong competition last week from Barclays Wealth and the Islamic Finance Council to claim the customer focus prize and Deane said he was "delighted" to have taken the top award too.

"This reflects all the hard works the guys have done over the past two years," says Deane, who left Old Mutual in 2007 to join Royal London. In his time with the group, Deane has overseen the integration of Scottish Life International and Scottish Provident International to form Royal London 360, the group's international arm.

As well as 360, Deane's intermediary division comprises Scottish Life, Scottish Provident and insurer Bright Grey, which he oversees from his office on the corner of Edinburgh's St Andrew Square.

The income release product for which Scottish Life has won plaudits has grown the firm's share of its target market from 3.5 per cent in 2007 to 21.6 per cent this year, winning praise from independent financial advisors (IFAs) along the way.

Figures released on Friday in parent group Royal London's third-quarter update revealed that Scottish Life posted a 6 per cent increase in new business in the three months to the end of September, a feat that Deane attributes in part to the award-winning product.

The update to the market said that income release "continues to be very popular with IFAs" and that, after internal transfer are excluded, Scottish Life holds a 37 per cent chunk of IFA sales in this sector of the market.

Owen Kelly, SFE's chief executive, praised the income release product, saying: "We had an impressive range of innovations this year, but Scottish Life came through because the company reacted to a change in legislation that allowed them to create a new pensions option for a much wider range of people.

"It opened up a route that had, until now, been restricted to a very limited group. At a time of increased focus on the importance of pension provision, this innovation really is focused on customers."

But Deane isn't satisfied with just taking a bigger slice of the market – he wants to grow the entire pie instead. As you may expect from someone who has plied his trade in the financial services sector – also listing Axa Sun Life, Century Life, Adepta and Laurentian Life as past employers on his CV – Deane is almost evangelical when it comes to encouraging the public to save for their retirement.

"A lot of work went into talking to customers and IFAs – because we only sell through IFAs – to create this product," he explains. "In particularly, we worked hard on a set of literature that clients can understand. One thing we know about pensions is that most people perceive them as dull, boring and complex.

"We're hugely concerned that people aren't providing enough for their retirement. There's now a realisation about the difficulties people will have in funding their retirements.

"We saw income release as a product that would give people as much flexibility as possible in the way they retire but also, when people saw they could take money out under the new legislation, that people would be keener to save in a pension."

Getting the literature right – using understandable language rather than technical terms – is key for Deane, who wants to make his firms' interactions with clients as clear as possible.

"This is a terrible industry for talking in jargon," he admits. "Even when we don't think we're talking in jargon, we can be.

"It's been hugely important for us to talk to clients – in focus groups or over the internet – to get reactions from clients and ask them if they understand specific words. Not because clients have a lack of education but because we use words in a very specialist way and we forget that when we deal with people to whom financial services is just a very small part of their lives."

Deane thinks the push for clearer language "transformed" his organisation over the past two years and he pledges to continue to cut out the jargon.

His clarion call for straight talking with clients will no doubt strike a chord with the broader financial services sector and with SFE, which highlighted the issue as a problem in its submission to the Turner Review back in June.

While the UK government investigated the origins of the banking crisis and steps to reform the system, SFE took the opportunity to call for the industry to go back to basics.

"Why even say 'mortgage', when we mean 'a loan to buy a house' or 'pension' when we mean 'savings for retirement'?" asked Kelly in his submission to the Turner Review."

He thinks companies should say "shares" instead of "equities" and say "high risk" instead of "sub prime".

Kelly added: "Our industry is central to everybody's lives so it's even more incumbent on us to make ourselves understood as widely as possible."

While Kelly rallies the rest of the industry to his cause, Scottish Life appears to be a step ahead.