Howorth’s way

Aside from a full service corporate advisory service, JLT Benefit Solutions has built a unique relationship with Paternoster and developed its own group Sipp through a strategic stake in FundsDirect. No wonder managing director Duncan Howorth thinks the firm deserves a higher profile. Helen Monks finds out more

“We’ve never quite joined the ranks of the likes of Aon and Mercer and it is an ongoing challenge to get the recognition we deserve. There are misconceptions about what we do. Not everyone realises we are the fifth-biggest employer of actuaries in this country and 40 per cent of our business is business consultancy.”

Another misconception Howorth seeks to challenge is the role of acquisitions in the growth of JLT – rather than simply buy business, the firm’s rapid growth has principally been organic through dealing with customers in the right way.

The most recent purchase came in July when the firm completed the acquisition of Portland Pensions for £2.4m but Howorth is quick to dismiss the charge that JLT has grown largely through acquisitions, making the point that while revenue growth has increased to £80m from £30m in just six years, only £10m of this impressive rise has been generated by acquisition. The rest has been through organic growth.

“It is all about client focus. I know everyone always says that but this really is the case for us,” says Howorth, describing the culture at his 1,000-strong organisation.

Howorth’s commitment to this cause is apparently fierce and he admits his colleagues would probably describe him as “ambitious and often impatient”.

The highly focused 50-year-old from Esher, Surrey, took over as managing director of JLT Benefit Solutions in late 2005. Since then, Howorth has been charged with the task of driving this client-centric culture across all of the numerous JLT Benefit Solutions businesses. His role also includes developing new products and services, overseeing acquisitions and, importantly, moving up a gear on brand development and awareness.

While in terms of profile JLT may not yet have quite punched at the weight Howorth would have liked, the business is among the UK’s leading employee benefits providers, offering clients a centralised source for a breadth of pension and other benefit needs. The JLT remit includes pension consultancy and actuarial services, healthcare, benefit communications and scheme administration and also extends to offering outsourced services for life offices, flexible benefits scheme imp-lementation, Sipps and wealth management services.

For JLT, this breadth of services is a key differentiator of the business. In terms of how one company might maintain the requisite service levels against such diversity of clients, which include huge institutions to medium-sized businesses and individuals, Howorth says no matter who the client is, the approach is the same: “At the centre of what we do is accountability of performance – we’re keen to assume responsibility for the client relationship.

“The key is to measure performance. Our approach is not just about asking clients ‘What do you want us to do’ but also ‘How do you want us to do it and how can we measure it?'”

To this end, JLT operates what Howorth describes as a highly structured client feedback and monitoring process designed to make sure JLT is delivering the service promised and ensure any problems are teased out at the earliest opportunity. Howorth says it is precisely this modus operandi that accounts for what he says are very low attrition rates for clients.

In terms of how JLT arrived at its broad range of services, Howorth says it was a case of looking at where the organisation’s core skills were and where these skills might be deployed elsewhere.

Arguably, this sort of approach is something corporate advisers could do well to take on and could serve them well as conditions in the market change: “We got to the stage we’re at by asking: ‘What are we good at and how else might this allow us to be of help?'”

A good example of the agility to move an existing skills set to a new environment is JLT’s relationship with bulk annuity player Paternoster, which is headed by former Prudential chief Mark Wood.

JLT recognised that while the defined benefits sector was in decline, the skills and systems the company had in this area could be applied in the far more buoyant bulk annuities market.

Last year, JLT began working with Paternoster in its bulk buyout business which essentially takes on the risks associated with companies’ defined benefit pension schemes and assumes the responsibility for paying these schemes’ pensioners into the future.

Howorth says: “The challenge for us is that a substantial part of our income is linked to defined benefits, where there is little growth and long-term decline. However, we had the systems’ platform that could administer schemes for people entitled to those benefits.”

JLT supplies Paternoster with a systems plat-form that can help give quotations and administer the pensions.

Howorth recognises that these days the focus for consultancies has moved away from defined benefits pensions to a broader remit employee benefits advice. Clients want advice on flex schemes, web-based tools, better employee communication and helping members with investment advice.

JLT is well placed to supply this variety of services, says Howorth: “What’s driving the business at the moment is that pensions is not the be all and end all, they’re just one part of savings. The question now is what role can we play in helping people save for the future through the workplace.”

Future developments, says Howorth, will be about ongoing innovation in the flex market and a development of the cafeteria approach. “The next stage is to say to employees: ‘Now you can go into the wider aspect of savings and choose other providers.'”

In preparation for this sort of development in workplace savings, JLT has what Howorth describes as a strategic investment in fund supermarket FundsDirect. Recently, using the link-up with FundsDirect, JLT introduced a group self-invested personal pension, predicting other major pension providers will follow suit.

The Sipp is being positioned alongside JLT’s occupational pension scheme and provides access to 1,500 funds through FundsDirect. Employees are also able to invest in property and unlisted shares.

JLT expects to see more interest in and take-up of group Sipps as the shift to defined contribution corporate arrangements and the decline of defined benefits continues. But the shift to DC from DB is, of course, just one issue that is changing conditions for corporate advisers.

“The retail distribution review will have a material impact on the IFA market. In time this will increase professionalism in the market and will drive and accelerate the move from general IFAs to wealth management. I see that as a very positive thing,” says Howorth.

An area he is less positive about is the trend for providers buying up IFAs and employee benefits consultancies following Axa-owned Thinc’s purchase of PIFC Consulting, making it the first corporate IFA to be bought by a provider, aside from the benefits arm of Aegon-owned Origen.

“I’m totally perplexed – this is a strategy that is unproved. Look at the money lost through the likes of Millfield. It’s dangerous to confuse manufacturing and delivering products to selling them and it is unclear to me why IFAs would potentially endanger relationships with providers as well as clients – you can’t compete with the people who pay you.”

Howorth is a dedicated member of the Society of Pension Consultants, where he routinely wrestles with policy issues for the industry,

This sort of dedication is, perhaps, a long way from the young man, fresh from finishing his O levels who approached a careers adviser to try and decide what he might do for a living: “They said to me: ‘You’re good at maths so you can either go into insurance or banking.’ I saw banking as sitting behind a glass screen and counting out five pound notes so insurance it was. I was assigned to a pension department on the first day and since then I’ve never looked back, or got out, depending on which way you choose to look at it.” That was 1976 and, without anything resembling a career master plan, more than 30 years in the industry have seen him set up his own business in 1988, GM Benefit Consultants, which was sold to then Abbey National in 1994.

He lists setting up on his own as a major moment in his career: “After two weeks we got Toyota on board and we never really looked back. New clients said to themselves: ‘If they’re good enough for Toyota, then they’re good enough for us.'”

In 1990, with Personal Pension Management, Howorth helped launched the first Sipp.

Prior to joining Jardine Lloyd Thompson, Howorth was chairman of Abbey National Benefit Consultants.

In his spare time, the married father of two children, aged 10 and 12, is a keen sportsman and cricketer, coaching his local cricket club’s young players.

The hard-working golf enthusiast also enjoys “a good meal with good wine” when he has time to relax.

For someone as focused on his life’s work as Howorth, it is hardly surprising his children don’t tend to see much of their father in the week but, come the weekend, he adopts the traditional role of the dad happy to taxi his offspring to their sporting endeavours while he holds the coats on the sidelines.


Born, High Wycombe

Leaves school after completing O’levels and begins career in pensions at Equity & Law

Sets up GM Benefit Consultants

GM Benefit Consultants buys James Hay

Launches the first Sipp with Personal Pensions Management

GM Benefit Consultants sold to Abbey National

JLT buys Abbey National Benefit Consultants

Takes over as managing director at JLT Benefit Consultants

Case study – Paternoster

Wood: ‘JLT got under the skin of what we do and understand when something is important to us.”

Paternoster describes its key objective as ensuring long-term security for scheme members while delivering high levels of customer care. JLT provides the company with assistance producing quotations for defined benefit pension plans and the administration of the schemes once Paternoster takes over from the donor organisation.

Mark Wood, chief executive of Paternoster, says JLT was selected around a year ago on the basis of its approach to understanding his business: “They got under the skin of what we do and understand when something is important to us.”

This approach proved particularly crucial when it came to the structuring of the contract between the two operations, with Wood placing a high importance on a set-up that could build in the flexibility the new operation needed: “With something new, there is always the danger of tearing off more than you can chew. We were able to draw on the resources of JLT depending on our needs at very short notice.”

More generally, Wood says he was impressed with the way Paternoster’s proposition sparked imaginations at JLT, when its competitors were more inclined to take more conservative approaches: “JLT had the most imaginative, informed and forward-thinking approach to their service structure of our contracts, which was a fundamental point.”