Thoughts from an interim working in the financial services sector - Chris Plumbridge BA ACA
As a specialist in the financial services sector, what in your view are the critical success factors that will pave the way to a sustainable recovery?
For the financial services sector, I think that there are three critical success factors:
the availability of credit/liquidity. For example, in the retail mortgage sector the key constraint is the availability of funds to lend - not qualifying borrowers or properties;
a stable and predictable regulatory regime. Understandably, in view of recent events, regulators are concerned about financial services institutions’ solvency and risk management (amongst other things). However, if the solvency regime is too stringent then it will constrain those institutions with money to lend and/or invest and slow the pace of recovery;
confidence. Investors - particularly retail investors - tend to invest at or near Market peaks. Any sign of returning confidence and returns will attract investment out of defensive investments (For example, cash) and back into equities and other risk-based investments.
Given that you are an experienced Interim Finance Director, what are your predictions for the finance section of the interim market over the next 18 months?
I think that it will be very active - particularly for Finance Directors in the financial services sector.
They face a number of unique and demanding challenges including not only the evolving capital and liquidity regimes (and the additional pressures that they bring to acquiring and retaining sufficient capital and liquid funds) but also enhanced financial risk management; margin management (including cost of funds); and, the issues of doing business in a demanding and competitive environment that many of them will not have experienced before.
This will create opportunities for experienced, flexible and pro-active interims over the next economic cycle.
What are your thoughts on the current opportunities for interim managers, in terms of levels of demand and rates?
In 2010, my experience has been that demand and rates have stayed firm and I do not expect to have to compete on price to get work. Also, I am seeing a lot more risk/reward type pricing. For example, where a client has a major risk project then the interims’ remuneration is (partly) a function of the financial risk associated with that project.
What do you look for in a potential interim assignment?
I look for two things in a potential assignment:
I have to be interested in the clients’ problem. If you are not interested - why do it?
I have to like the client. If you do not like them why would you be motivated to help them?
Why did you chose interim management as a career?
Because I wanted the flexibility to decide when and where I worked and what I worked on - without the associated issues of business politics and other internal distractions.
What do you consider your biggest achievements in interim management?
Devising, developing and implementing a completely new tariff structure for the UK’s equity settlement system (part of the UK’s key financial infrastructure) with the active involvement of the Market, HM Government and the UK’s Regulators.
Also, creating a new corporate ownership and reward structure (including migrating from a partnership to a corporate structure) - over a period of just over two years - for one of the largest offshore legal professional and financial services businesses.
What advice would you give to someone thinking of a career in interim management?
Think very carefully before committing. You have to WANT to pursue this type of career. If you are just thinking of using it as a ‘fill in’ between other jobs - clients will spot this immediately and not hire you.
Have a working spouse or partner. It is a vicarious existence: the liabilities are predictable and the income is not!
Be prepared to work alone. Even if you are working as part of a team you are ‘among them but not of them’. That subtle distance between you and the client is essential to your objectivity and success.
What do you enjoy doing outside of work, what would you like to do more of in the future …any other interesting comments you’d like to make?
I enjoy watching rugby and cricket and I would like to do far more of the latter - if circumstances permit!
I also collect Japanese wood block prints from the early 20th century and I want to travel to the US and Japan where there are the largest collections on display.
Also, interim management can be and should be - fun! You get to meet many interesting, committed and pleasant people - far more than you would expect to meet in a conventional career - and it can get exciting when that new business launches, that key project is finished or that key deal is completed.