Fraser Kerr is joined by ii CEO Richard Wilson. Richard shares his outlook on financial planning, the industry as a whole, personal motivations and behaviours.


Fraser Kerr: Hello and welcome back to Wealth Wise the financial planning podcast from abrdn. As you know, my name is Fraser Kerr Regional Director here at abrdn financial planning. And in this series, we aim to bring you the conversations and collective insights to help you achieve more every day. 

I think we can all agree that a key focus and motivation for many is providing for loved ones and being able to support them both emotionally and financially. This is something that we see consistently with our clients, and they bring this narrative to life firsthand. Today sharing personal experience and insight into his own position, I'm delighted to be joined in a rather cold, wet, and miserable Edinburgh morning in our 1 George Street office for a particularly exciting episode. One I'm really looking forward to even though my guest may not be quite so sure what he's let himself in for, CEO of both Personal Wealth and ii at abrdn, Non-Executive Director at the Personal Investment Management and Financial Advice Association, and panel member at the Bank of England, a father and grandfather, Richard Wilson.

Richard Wilson: Morning Fraser, thank you very much for having me a pleasure to be here. 

Fraser Kerr: Today, we're looking to get some thoughts from Richard on his outlook and philosophies behind not only financial planning, but the industry as a whole, looking to engage with them on his own personal motivations, his why, and looking to take a peek under the bonnet at his own financial advice and behaviours that he tries to instill in his own family. I mean, first things first, considerable achievements Richard, not bad for my boy born just a couple of miles from here as well. So would you be able to kind of take us back into how we find ourselves here today, and just a little bit of a snapshot into your career to date. 

Richard Wilson: Thanks Fraser, we were talking before we went live about where I was born. And because I was born, just round the corner from the office here, and I wouldn't really have expected 50 something years later to be sitting staring at my back door. 

So there's a, there's a, there's a journey for all of us. And I'd like to kind of pretend that there was some grand plan. But there was none of that. I went to school, like all of us did down the road, went to uni like some of us do. And then took the first job, fact the only job that I was offered, which was in a bank in London. And that's just started a process of just working hard trying to learn, trying to be better by showing up first, and keeping your nose clean and getting the job done. And when the next thing came up, try and put your hand up so that you don't miss an opportunity and, prepared over time, I think to learn how to fail better. And to force yourself to keep going where sometimes you feel that you can't see the light. But I've always had the great fortune to have a supportive family. And both my parents were in teaching. And it was always very, very valuable to be able to go back home and not talk about anything you do for a living, because it's all nonsense. And talk about things that matter like education and the why, what problems are you really trying to solve? And how are you really trying to solve them? And how can you manage yourself so that you can get up in the morning, wanting to go to work. 

Fraser Kerr: Overwhelming responsibility that you just talked about, and taking responsibility for your own future. I've got an 18-month-old little girl now, so I always considered myself hugely driven, hugely ambitious, you know, I'm from council estate in Scotland as well. And draw definitely parallels with that chip on your shoulder that you've referenced in the past and move wanting to prove yourself and move forward. So once you have that family as well, did you find that a difficult transition to manage because you go from being focused potentially on yourself and your wife, potentially on trying to develop your own career, but then all of a sudden, you realise that you're doing it for very different reasons, very different motivations, and almost like your why shifts a little bit, certainly what I think I've found. 

Richard Wilson: Oh without a doubt, you mean, when you go through the huge transition from not having children to having children, you're in for life phase two, it's just a different life. Yeah. And what matters, changes completely, doesn't mean to say you're a better or worse father, as a result, in sometimes the time that you, you thought you sacrificed or gave up with the children, because you had work to do that, that time you don't get back. So, you need to be as thoughtful as possible about how to get the time that you can say no, in the calculated decisions with it. Well, it meant a little bit, because when you've got children, certainly in my experience, I've got four… you're kind of overrun.

Fraser Kerr: You’re outnumbered, outmanned, and outgunned.

Richard Wilson: By the time you've got three, you're certainly outnumbered, and at four, it's game over. But you know, your priorities just change. And again, then you're overriding priority is to do what's best for them in the best way that you can. I was always one, I think that would always try and treat the children as kind of young adults. So that they mean, you had sensible conversations, and they need to make choices and understand what the consequences are. And that's all part of owning your own life. Because ultimately, one day it'll be just be down to you, and there will no plan B. So, the earlier that you can start having those conversations, the better I think.

Fraser Kerr: So you've never really been afraid to sort of empower the kids let them fail themselves I suppose and you know, take the responsibility on their own shoulders too.

Richard Wilson: For sure. And all those things. Some things you would much rather they did at home with and they play at home rather than play away. Some of the the learning experiences, whether it be with kind of money or alcohol or anything else you'd much rather had your eyes on than not. But they still need to take responsibility at some point whether it's whether they're 12 or 15 or 18. They'll make their own choices whether you like it or not. And the question really is not whether you trust them but whether they trust you.

Fraser Kerr: Financial advice forms a cornerstone of a lot of people's decisions. And I always think, you know, it gives people options. It creates opportunity and gives people the options to do things. How have you tried to sort of manage that with your own kids? being involved with clients that’s something that we see a big spectrum of in terms of leaving them to crack on with it and fending for themselves right the way through to do everything for them. Is there any sort of things that you've found particular success with, with the kids regarding trying to instill good behaviours for them.

Richard Wilson: That’s a great question. And touch wood, I'm super proud of, of all of them. But I think what I've found is that you start early on, because they're fully dependent on you, and you have conversations with them about what things cost or what a budget is, and whether you can afford something or not, and there's choices to be made. Then there's my daughter said, at some point, I said, when it's time for Christmas, I said “Darling we can't do that” and she said “well, why not” I said “well, it's just not in the budget.” And she said “Well, just change the budget”

Fraser Kerr: You can fault the logic. 

Richard Wilson: It's just an obvious easy solve because there's a magic money tree somewhere that clearly it was just dad being difficult, and then over time, but when they get their first jobs, they need to make their own choices and live within their means. And part of that managing that without being kind of too, too tight. I think it's probably the word. You want them to know that they have their own choices to make, and hopefully and what's happened, certainly in my case is at some point, and it's usually I think, infamy when they've gone through school, and where they go to uni or not at some point where they become independent. And you hope that we'll want to come back and talk about a plan and choices. And some of those things are, are huge choices, whether they be renting or trying to save to buy a house, or where to work, or how to figure out, do I have put money in an ISA? And can I get it back? What's a pension about? And what do I need to do versus what should I choose to do? You can't force things down anybody's throat mean, one of the things that children if, quite often, if you if you told them that they want to do the opposite, you've got to find a way that they want to ask.

Fraser Kerr: Yes, it's more of a natural conversation

Richard Wilson: And it's a long journey. So, you don't want to put anybody off talking about it is more listening than telling and then from time to time, when they are looking for an answer, then help them think about what that should look like. So that they have…. so they own the outcome. And then just be there to help as and when. And that's really it, because you're there to be a support and just to love them. And that covers the whole array of choices, and they're their own people.

Richard Wilson: When you look at your career, you know, you've said success lasts a millisecond and been very focused on that moving forward. So, you probably one who could be accused quite easily Richard of not being able to enjoy your successes in the moment, not actually been able to kind of take stock and you do recognise success, but you probably tend to recognise it and others more than yourself from sort of my impressions. 

I think certainly, we’re all flawed in different ways, it's clearly a flaw that I've certainly lived with for a long time. And part of that, I think, is the, the struggle that many people have. And, certainly I do what I'm telling you, I'm getting less bad or better, which is the ability to live in, in the present. Rather than everything that you're doing being for tomorrow, you're always kicking the next ball. And, if you score a goal, it doesn't matter, because there's another ball. And I certainly get more personal joy out of other people's success. 

Fraser Kerr: Certainly seen that in a professional capacity and how you try and develop and bring on people and you always talk about that. 

Richard Wilson: Because I enjoy, I enjoy the energy of working with people. It's just how I'm built. It's what gets me up in the morning, what's what worries me at night. It makes my, my life more enriching.

Fraser Kerr: A theme running through the podcast and the series of Wealth Wise has always been that within the industries that you're responsible for, and the teams that you manage, it is undeniably got such a strong technical underpin that runs through it. But it really is a people business, first and foremost. And that's externally and internally, it's clear that we are a bit of a crossroads within the industry, there's seismic change coming, you know, from the advent of different technology and different processes and developments there as well. I mean, does that sort of excite you as well going forward? Do you see the opportunity there more than anything.

Richard Wilson: Always. And I think one of the things wherever I've worked, whether it be in the US or in France, in financial services, there will always be a time, this is true for the last 25 years where a board member or a CEO would say, you know, we're actually a technology business. And you're sitting there thinking, No we're actually not. We all need technology, but our actual business is to serve our customers or to wherever our business is. And that's only in all about us as a group of people figuring it out how to deliver that service, make that change, support that outcome and make it something that's viable, and solves the problem, inevitably, that is unavoidably a lot to do with technology. And we've seen over the last 20/25/30 years, that technology means that some businesses and some business sectors become suddenly, you know, extraordinarily big growth businesses and others just fade away and die. And that's, that's largely about the question of their proposition. But behind that is always been about technology, whether it be Netflix versus blockbuster, or any other kind of…

Fraser Kerr: My favourite one is in 1901, one of the biggest companies in the world was one that sold whale oil. And it was because it was used but by 1903, the business was bust because it just became obsolete in that 24-month period as well. And it's just times are changing, and you need to advance and move with it.

Richard Wilson: You have to flex go and I think what we're seeing now is it happens to be we're entering into why a think is a period of rapid change brought on by AI, which meant I've been, I wouldn't say tinkering. But I've been working around this subject for a long time. But my brother's an AI guy, my dad taught cognitive sciences. He's always been in the mix. But it's only really in the last year that you've seen this, this extraordinary acceleration. And I think that will just accelerate some of those things that we've seen before there'll be industry change, it's just going to happen a little bit quicker than it did before. So there's this sense of urgency to, to win, and move faster before you lose.

Fraser Kerr: Mark Cuban said, he's not scared about the competitors today. He's scared about the 18-year-old in his garage, you know, working away, he's the one who's coming for him. And that's where he's thinking about the next threat coming from. 

Richard Wilson: That’s for sure. There's a chap called Ben Rosen, who was the CEO of Intel. 

Fraser Kerr: Yep.

Richard Wilson: And during their massive growth period back in the, it must have been the 90s - in his book, one of the main quotes was “if you have time for lunch, you will be”.

Fraser Kerr: Yeah. 

Richard Wilson: So, there's a little bit of staying on it. Because you've got hundreds of 1000s of people in a number of countries all trying to do the same thing. Most of us are using the same tools. So, it's about how you put those tools together and how you present the solution when you are proposition and…

Fraser Kerr: Doing it better.

Richard Wilson:  And you gotta be able to do that in a way that's just quicker than the other guys. 

Fraser Kerr: Something you touched on there as well is just about that responsibility for people. And that must be quite a challenge for you as well, especially with where we've been over the last five, six years. I mean, since you became CEO of interactive investor in 2017. I mean, it's probably not been a more challenging time to be a CEO of a UK-based organisation with the headwinds that you faced into I mean, even looking after your own people internally, it must have caused, you know, potentially sleepless nights as well. 

Richard Wilson: Well first and foremost, it is a privilege and an obligation to represent the people that you work with. And so that seat you have to sit in, and that's just a responsibility you need to wear it.
And that means there are decisions that that are necessary that you have to make for the team. Whether they feel good or feel not because frankly doing the right thing is usually the hard path. 

Fraser Kerr: Yep. 

Richard Wilson: And usually the one that has a lot of resistance, because it requires making clear choices so that you can articulate a very simple future. So that we know what we're aiming for. Because anything that's not clear and simple, usually falls to pieces. So that's certainly a responsibility. I enjoy that - doesn't make it easy. But the whole success is really driven by having the right team who are effectively making those choices. 

Fraser Kerr: Yeah. 

And you're there, largely to support them. 

Fraser Kerr: Yeah. 

Richard Wilson: And occasionally, you're wrong.

Fraser Kerr: Yeah. 

Richard Wilson: And you've got to be first in, you’ve got to lead from the front, you got to make those choices because that's your job. And if you didn't do that, you'd be letting the team down. So you just have to get over yourself and get on with it.

Fraser Kerr: Hindsight is interesting as well, I mean, you have throughout your career been a champion of democratizing. 

Richard Wilson: It’s not over yet by the way. 

Fraser Kerr: Yeah, no, absolutely not. Yeah. But you are that champion of democratising finance wanting to make financial services accessible to as broad an audience as possible driving engagement. But you've also been a vocal critic at times as well. You know, when you look at sort of the piece around Woodford the unfairness that you felt was rife there. You've know you've really championed that whole consumer first piece, thinking of the individual and that drove ii’s subscription model in the way that you've based and ran that. Where does that resoluteness come from? Richard? Is it just a case of you just do have the conviction, when you make the decision that you will stick by it? You'll admit if you're wrong, but in the first instance, you go into it with 100% conviction? 

Richard Wilson: Well, I think you've got – well there’s a question of kind of principles 

Fraser Kerr: Integrity

Richard Wilson: And some things that are just right or wrong. Yeah. And if you're clear on your principles, then lots of decisions are no sweat because it’s just right and wrong. And you're prepared to fall on your pen or your sword or whatever it is over them. And if you don't, you're not the person that you thought you were. So that was always my safety blanket, which I was pretty clear on principles. And I do have, I do have a particular conviction around fairness and fairness for me that's about a level playing field that's about people being able to make choices. That's about having transparency so you can see. And those three things, if you apply those robustly, are pretty straightforward. And so my advocacy around democratisation is, is to create that level playing field. I can't make people want things, I can’t drive anyone to better themselves. That's something that we all have our own choices and personalities. But what you can do is you can level the playing field, so that everyone has a fair shout and people who smash the lights out, you have a round of applause. And people who, if that's not their thing, perhaps we should try do something different. 

Fraser Kerr: Yeah.

Richard Wilson: But the only way I think to inspire and motivate is to give the option where you can. Without a level playing field, in whatever walk of life, whether it be investing or anything else, if it's not a level playing field, the dice are loaded against you and that's not right. 

Fraser Kerr: And something you said there as well, you know, your career is far from over. And I'm not trying to retire you during this podcast, that's absolutely not the position I'm trying to take at all. 

Richard Wilson: Here's your cake. 

Fraser Kerr: You're probably wondering why I've gathered you all here today. But in terms of where we are, I’ve been quite vocal throughout the podcast series as well, that for our clients, something that we've seen is that that transition into retirement for many can be the most significant personal change that they go through, probably since they entered the world of work, you know, so many people derive their value, their self-worth, their purpose from working. Do you think that we need to be potentially doing more on that behavioural side as well, just to support people with that transition? 

Richard Wilson: Well, that's a that's a very big question. Because also, it's linked to what your view of the future is. And my own view is that whilst everyone's got to make their own choices in life. And if you just go from work to not work, that's a massive transition. 

Fraser Kerr: Yeah. 

Richard Wilson: In terms of mental wellbeing, there are lots of implications there which need to be carefully thought through but one version of the future which I think is going to be the ability to find things which you're remunerated on and the ability to work on things without it being 40 hours a week. I think we'll have much more of that in the future as we have a sort of a mixed type work life and that I think in terms of that transition, it’s much healthier, because it means that you can actually, if you choose to do less rather than going from one to zero you can then experience, you know, different parts of your life without cutting the cable on work completely. That's certainly how I how I see more of the future and certainly how I see my own future. The idea of just stopping is just - I can't see that. 

Fraser Kerr: And do you have that trusted adviser and that trusted person that you try and outsource some of that worry or that you can more focus on the family and your job as well? How do you sort of square that circle with yourself? 

Richard Wilson: I mean, I certainly like taking a little bit of control. That's probably another character flaw. But I get a lot of advice, a lot of which I didn’t ask for. I do get lots of lots of input. And because I'm fortunate enough in terms of my financial life, that I'm plugged into all of our content. So I've got a reasonable view, but to some extent, and I have taken advice several times. It's almost like your medical health, you can read the medical encyclopaedia, but not many doctors will prescribe to themselves, because you're obviously you're conflicted. So your ability to objectively look at yourself, is a gift that almost no one has. So there's a lot of value in having someone else who does this for a living saying, well, this, most people in your situation would be doing this, and that you need to think about because your choices are XYZ. 

And we all have points in our life. And certainly it's true for me. And it's probably true for everybody, where if you don't take advice at that time, it would be a regret. And this is all about not having regrets, because it's about having confidence. And your financial health is so closely related to your own sense of self-worth and your own kind of mental health. It's just a very important thing it’s like even just a medical checkup - it's part of your health management. And we, as human beings, I think we underestimate how significant your financial health is to your overall well-being. 

Fraser Kerr: Yeah. 

Richard Wilson: Most of us, this certainly includes me have spent years and years every day worrying about money. 

Fraser Kerr: Yeah. 

Richard Wilson: And we don't talk about it a lot, because everyone rocks up to the office, or whatever they do with a smiley face. They don't share those anxieties, but most of us have them. And I've had them for decades. So having someone to say and objectively, ‘actually, you're alright, mate - these are the things you should do. But we're all in the same boat so don't stress over this. And this is where you'll be so it's ok.’

Fraser Kerr: ‘These are the areas you should be stressing.’ 

Richard Wilson: And this is where you need to clip your sails in terms of expectations. So you just need to have a level set on what the reality is - I mean, those are, those are just very healthy things to do. And the more that we're able to have those conversations, the better we'll be as a society I think. 

Fraser Kerr: In terms of the ambitions for financial planning, not just as an industry, but for abrdn financial planning, a pretty broad question, Richard, but how do you see that developing over the coming years as well? 

Richard Wilson: Well, I mean, the simple fact is, it's going to be hugely disrupted. The technology, the need to be able to deliver advice at a cost to people which is affordable, means that historical models just don't work. 

Fraser Kerr: Yeah. 

Richard Wilson: So the only way to solve that is through technology. And that will be a radical change. Now, whether those changes are driven by technology alone or by competition, or in some cases, we know the FCA is actually taking a close interest through consumer duty, that some models and the challenges around you know, the ongoing advice, fees, etc, will lead to inevitably people reassessing how they deliver that service and how it's paid for, because some of the old models simply won't be sustainable. So it's going to be a significant change. In the last few years, I think we've gone from 80 something thousand advisors in the UK down to 20, something thousand advisors, and we've got a significant number of advisors who are in their, their, their late 50s. 

Fraser Kerr: Certainly an ageing population, isn't it? 

Richard Wilson: So the, the model itself is being challenged by kind of the talent pool, which is being challenged by how you monetize the service, and we're gonna have different providers, ourselves included, because one of our principal differentiators or principal strengths is to be able to disrupt on price. 

Fraser Kerr: Yeah. 

Richard Wilson: So you'd expect folks like us to move the dial on that, but with the outcome that the consumer wins, you can support the what's the savings gap? Because of course, the advice gap is, is exists because of the savings gap. How do you get people saving younger, for longer, so that they have a reasonable opportunity to accumulate and compound? So that in later life, they're in a sensible place - you need to start saving in your as soon as you hit 20. If you're not doing it, you're making a mistake, and getting that over and delivering that in a way that's engaging is the next barrier that just has to be solved. 

Fraser Kerr: Well, Richard, thanks so much for being with us today. I really can't thank you enough, especially for being so transparent and open and forthcoming. 

Richard Wilson: Thank you very much for having me. It's been it's been a pleasure. And then thank you for the conversation. 

Fraser Kerr: Thank you, Richard. As always, a special thanks to you, our audience for listening. If you want to find out any more about the topics that we've discussed some of the key tenets of financial planning. If you have any questions for Richard in the first instance, I'd always encourage you to contact your financial planner. However, we'd love to hear from you directly as well. If you've got any questions or comments, you can drop us an email as always at Wealth Wise at Wealth wise is available on all usual podcast platforms and wherever you access these please like and subscribe so that you stay notified of changes. Join us next time and thanks again for your time.

This podcast is provided for general information only and assumes a certain level of knowledge of financial markets. It is provided for information purposes only and should not be considered as an offer investment, recommendation or solicitation to deal in any of the investments or products mentioned herein and does not constitute investment research. The views in this podcast are those of the contributors at the time of publication and do not necessarily reflect those of abrdn. The value of investments and the income from them can go down as well as up and investors may get back less than the amount invested. Past performance is not a guide to future returns return projections or estimates and provide no guarantee of future results.

This podcast is provided for information only and does not constitute advice. If you are unsure of any of the terminology used, you should seek financial advice.

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The views in this podcast are those of the contributors at the time of publication.

The information is based on our understanding as at 28 May 2024.