Otto Thoresen wants to help you - to save more, to manage your money better,
to avoid the kind of financial disasters that can ruin lives and lead to
burdens that take years to lift, if they lift at all. He wants you to have
fair and impartial advice on everything from mortgages, insurance products,
savings and pensions. And he wants it to cost you nothing.
Today, the 51-year-old insurance chief is going to explain how. After 14
months working on a Treasury-sponsored review into financial advice for the
public, he will present the Thoresen Review, his blueprint on how the
Government and the financial services industry can work together on an
initiative that could - should - change lives.
“People need somewhere to go. This is a service that should be delivered in an
environment that is not driven by sales. This is not about dealing with
people in crisis. The challenge is about getting people to access the
service at the right time.” Mr Thoresen, the UK chief executive of Aegon,
the Edinburgh-based insurer, was talking in the Treasury's new offices in
Westminster. What he envisages, however, is not a centralised, remote
service, but something that anyone can turn to at any time, on the
telephone, via the internet and on the high street. It can be independent,
too, he believes, despite the involvement of the financial services
industry.
Although Mr Thoresen will target the 7.5 million people deemed to be the most
financially vulnerable in society, his ultimate goal is to foster a
nationwide service that is available to everyone. His recommendation is that
Government and the financial services sector - banks, building societies
and their ilk - share a bill estimated at as much as £60 million a year to
help to provide advice on financial issues from paying tax bills to mortgage
problems. If a £12 million regional pilot scheme is successful, he wants to
see a national rollout of his ideas, run by a dedicated management team and
full-time staff for drop-in centres, helplines and a website.
“You start with the whole debate around how to improve the level of financial
capability in the UK,” Mr Thoresen told The Times. “How to help people to
engage with their financial affairs. There is a gap, mainly in the territory
of preventative guidance. We want to address that.”
Mr Thoresen, clearly, is not short of ambition. Successive governments have
tried to close the savings gap,to resolve pensioner poverty and increase
basic financial literacy in a population mistrustful of banks and insurers.
Successive governments have failed, their initiatives having run out of
steam or expired when their funding has been diverted to other, more
pressing areas. And still people do not save enough, still they run away
from their bank statements.
Mr Thoresen admits that carrying out the review has become “something of a
passion”. He was asked to carry out the review by Ed Balls, the former
Economic Secretary to the Treasury and a close ally of Gordon Brown, in
January last year. For him, however, the issue was inspired further afield.
“It all started in Washington in 2005 at a global ageing conference,” he said.
“There were people there from industry, the third sector [charities,
not-for-profit organisations] and governments. I went along. The penny
dropped for me while I was there that what was happening was quite seismic.”
Mr Thoresen argues that the single most important issue for individual savers
in the UK is the move away from final-salary pension schemes to more risky
money-purchase schemes. These are more reliant on stock market performance
and Mr Thoresen believes that their greater emphasis on individual
responsibility is setting the pace for the future.
“Then I was given the platform to speak about the industry in October 2006 at
a conference run by the Government and the Financial Services Authority. I
began to feel that investment in financial services is important not just
for the individual but also for the industry.”
The obvious commercial benefit to companies such as Aegon of having a
population that is well-versed in matters of savings and investments is not
lost on him. However, Mr Thoresen, who has said from the beginning that
consumers would have to feel that they were being given “on my side” advice,
believes that the scheme can be impartial.
The initial response from the Government has been encouraging, spurred, no
doubt, by an approach by Mr Balls that was “a focus on not on if but how” to
introduce financial advice. Mr Thoresen is suggesting “Money Guidance” as an
initial tag for an advice scheme, but he is keen to deny that he is creating
a brand. He is also determined to get his way in the face of not
inconsiderable opposition. He acknowledges that nervousness about the
project still exists among some of his peers in finance - “How is it going
to work?” they ask. “Why should we help to pay for it?” - but he counters
that with an idealism born at university with an early desire to put his
mathematical skills to work. A love of communication saw him develop an
initial career in marketing at Scottish Equitable; a head for the actuarial
sciences led him later to develop a path through Royal Life before returning
to Scottish Equitable to launch its international business.
Not that his review has dimmed his personal ambition. Speculation is growing
that he is a potential candidate to take over as chief executive of Standard
Life when Sandy Crombie, the present boss, decides to step down. Mr Thoresen
says that he is content at Aegon, however, which has been growing as a force
in savings provision and also as an asset manager under his supervision. He
will leave it to someone else to become the full-time manager of “Money
Guidance”, if that is what it is eventually called. With Aegon returning to
the forefront of his professional agenda, this might not be such good news
for the opposition.
C.V
Born: April 28, 1956
Education: first-class honours in mathematics and statistics at
Aberdeen University, Fellow of the Faculty of Actuaries, studied management
development at Insead
Career: joined Scottish Equitable in 1978, appointed marketing director
in 1984. In 1988 joined Abbey Life as director of marketing, moved in 1990
to Royal Insurance as general manager of strategic marketing. Became
managing director of Royal Life International in 1992. Returned to Scottish
Equitable in 1994 to launch Scottish Equitable International. In 1995 became
group development director of parent company Aegon UK. Appointed finance
director in 2000, chief executive in 2005
Other Interests: golf
Leader questioned
If you could change one thing in the financial and commercial environment,
what would it be?
Achieve greater consumer awareness of the importance of money issues, so that
people think positively and confidently about planning their financial future
Who is or was your mentor?
My father, a merchant sea captain, had a massive influence on me. He and I got
to know each other very well in his retirement, which I appreciated
What is the most important event of your working life?
Leaving Edinburgh in 1988 to work down South, at Abbey Life initially and then
at Royal Life, gave me experience of different corporate cultures. Leading
the review has given me the opportunity to see the long-term savings
industry from the outside in, which has been extremely valuable
Does money motivate you?
Yes, up to a point, as I want the best for my family. But I am also interested
in what I can contribute, whether to the business, or in being involved in a
project like the review
What does leadership mean to you?
Much of leadership is about communication and describing to people where you
want to get to, and then being able to take them with you as you move
towards your goals. It’s important to be able to energise people
Which business person do you most admire?
Sir Terry Leahy, of Tesco. I admire the way he has transformed the business
and achieve sustained growth
What gadget must you have?
BlackBerry
How do you relax?
Spending time with my 16-year-old son - I particularly enjoy attending
football matches with him. I also enjoy my golf
