Premiums and props: how the chair of Scottish Friendly is taking lessons from his key rugby role

John McGuigan currently holds the chair role at both Glasgow-based financial mutual Scottish Friendly, and sporting institution Scottish Rugby.

And while they may have differing remits, encompassing premiums and props respectively, he says their values are “very comparable and are born out of a long heritage of being part of Scotland, and what Scotland stands for”.

As for transferable lessons between the two, he cites rugby’s view that to win you have to have “excellence in your culture, anything you do that compromises that excellence will catch you out eventually… And I think that's a good lesson for us in financial services as well, in any leadership role that you’re in… once you’ve set your goal, you can't compromise”.

McGuigan says financial services form an 'integral' part of Scotland's economy. Picture: contributed.

His appointment at Scottish Friendly was announced in May of this year, just after it reported the strongest new business figures in its 162-year history despite “significant” market challenges.

In 2023 it notched up sales of £51.1 million, on the industry standard measure of annual premium equivalent, up from £47.7m a year earlier. Assets under management, meanwhile, increased to £4.6 billion, from £4.5bn in 2022, and the number of members jumped by 24,000 to 838,000.

The appointment marks the latest chapter in McGuigan’s career that he started as a civil servant, followed by the likes of senior posts at NHS 24, which he was tasked with reviving after its beleaguered debut, and telecoms giant Telefonica, which included spells in Slovakia and Germany. He later returned to Scotland and joined financial services stalwart Standard Life, and then when it was taken over by Phoenix Group took the group customer director hotseat there.

He agrees that bringing skillsets and perspectives gleaned from other sectors to financial services is advantageous. That included being involved in Telefonica-owned O2 being the first company to sell the iPhone in the UK, leading him to wonder “how would somebody purchase this online or in store? What happens if you want to take it back? What happens if it doesn't work? All that type of stuff”.

Moving into financial services in Edinburgh, he found it was for many the only sector they’d ever worked in, with the customer not necessarily front and centre. Dealing with customers “is the only reason you're there… if the customer part doesn't work, then nothing really works, from my perspective”.

McGuigan has also worked to power up and diversify financial services in his role as chair of Scottish Financial Enterprise (SFE), which he started towards the end of 2022 (with Sue Dawe of EY recently named his successor). He says that when the joined the trade body, he saw great potential to expand the membership, and take its reach beyond the same faces (“there was potential for groupthink in terms of how the world was being viewed”).

Another priority was giving more attention to companies at the more innovative, start-up end of the sector, and looking at what they have in common with vast incumbents. They included, he felt, “How do we look after customers? How do we reflect the changing needs that customers have? And how do we make sure as a sector, we address that.”

McGuigan says financial services are an “integral” part of Scotland's economy – SFE has said the industry could boost it by up to £7bn over the next five years – and he helped the organisation strengthen ties with the City of London, for example.

Fast-forward to the news this year that he was standing down, the organisation’s chief executive Sandy Begbie said: “John has presided over continued growth for our organisation both in terms of our membership and our profile in championing the interests of Scotland’s financial and professional services sector.”

Another priority for McGuigan is ensuring the talent pool available to financial services is as diverse as possible, in many ways including socio-economic background. The latter, measured by parental occupation, was found to have the strongest effect on a worker’s career progression compared to any other diversity characteristic – including gender, ethnicity, disability, and sexual orientation, according to a report by KPMG.

And the Scottish Friendly chair says that as a youngster from a council house in Johnstone on Scotland’s West Coast, “my careers officer didn't think financial services was something he’d put on my radar”. Now, he wants to “strip away the mystique” surrounding the sector for people who may not have considered it but for whom it could offer long, prosperous careers.

His role at Scottish Friendly also marks a change from organisations answerable to shareholders and the markets, “which is fine, it's a good model, and it works”. But the mutual is a “completely different construct”, for example it is better placed to give much-needed advice to people with relatively shallow pockets, for example. Another key aim is making products as accessible and straightforward to navigate as possible, which he acknowledges is “not perfect” but being progressed.

Growth for the organisation – whose top team includes savings expert Kevin Brown – will be via the products it already has, but McGuigan is also eyeing acquisition opportunities. Potential targets include not just areas where it is established, but also “organisations that are doing interesting things”, for example in digital.

And he recognises the key role financial services plays in society, while the UK’s Financial Ombudsman Service recently said the number of complaints received across the sector rose by a fifth in the second half of 2023. “People should be holding us to account for what we do,” he says of the industry. “It’s not doing something on the margins of people's lives, you're doing the thing that enables everything else in their life. If you don't have your health, and you don't have money, you're very, very limited. Money is a huge enabler. And we are the sector who provides such a big part of that in terms of a service.”