Interview with Honor Solomon – “The changing face of distribution”

We are delighted to begin our Distribution Leadership Interview Series with Honor Solomon, Head of Retail Distribution for the EMEA region at Legal & General Investment Management (LGIM).

Honor joined LGIM in October 2014 from BlackRock (and its predecessor company Merrill Lynch) where she worked for nearly 15 years in London, Paris and New York. Honor has accumulated a vast array of experience and knowledge of financial markets and investments having performed a number of different roles across Equity Sales & Trading, Relationship Management within Global Markets and Investment Banking, Institutional Sales to Local Authority and Corporate Pension Funds and she also led the team responsible for BlackRock’s relationships with private banks and stockbrokers.

Honor was hired from rival BlackRock with a task to take LGIM’s dominant position in the institutional market and repeat it in the retail space. Before Honor’s arrival, the insurer-owned asset manager was a leader of the pension fund investment world, but with aim to deepen relationships with financial advisers and the discretionary space. Honor has been instrumental in building LGIM a significant presence in the retail channel both here in the UK and in continental Europe, with the build-out of teams on the ground in key strategic European fund centres such as Frankfurt being a key focus of hiring activity over the past 18 months.

Here are some of the insights she shared with us on the evolving distribution function and landscape:

Amanda: “Thank you for taking part in the leadership insight, Honor. We’re delighted that you have decided to take part.”

Honor: “It’s a pleasure Amanda.”

Amanda: “So first question: it would be interesting to hear any thoughts or observations you have on how the distribution function has changed since you started out in the industry?”

Honor: “I’ll begin with what hasn’t changed, as some things are still the same as they were back when I started out 20 years ago. Firstly, depth of relationship is key. The most important area that I still want to get under the skin of when speaking with potential new distribution hires is to understand the connectivity someone has and the depth of those relationships. Secondly, a strong technical background is very useful, specifically an understanding of what you’re selling and knowing it inside out to allow you to get into the mind of the client in order to understand the challenges, opportunities, risks and benefits.”

Amanda: “That’s an interesting way of looking it. Even if there is an element of the black book still being a factor, this doesn’t count for a lot without it being a meaningful client relationship where you are the first port of call. And the biggest change?”

Honor: “In terms of change, undoubtedly the increased importance and recognition of culture. Specifically, employers are concerned with how they can nurture culture, keeping employee and client wellbeing at the heart of everything they do. The Covid-19 crisis has highlighted the importance of recognising personal as well as professional challenges that people are facing to build an efficient and nurturing working culture. My view is that the two most important rules to follow to foster a productive culture are that: family comes first, and no-one suffers in silence! This is what workplace culture is all about, whilst putting our clients at the heart of everything we do. These elements have been there for the last 20 years, but the increased focus on diversity and continuing to do the right thing by clients, are key as we look ahead.

Amanda: “I love those two rules – I’m going to steal those for our business!”

Amanda: “In terms of approach to distribution, specifically the way distribution personnel operate and sell product, has this fundamentally changed?”

Honor: “From my perspective, there has been a market shift in how distribution personnel interacts with and service clients. Regulatory change and heightened levels of scrutiny have undoubtedly been a catalyst. The training that distribution personnel are put through is much more rigorous, deliberate, and organised. The distribution conversation is increasingly shaped by what is and isn’t appropriate for the client profile. There is also an increasing emphasis on value for clients and pressure on fees is bringing down end customer’s costs to give them a much fairer deal.”

Amanda: “Agreed. This is a key change that we have observed. It is no longer a case of distribution people selling funds off the shelf, it is all about designing bespoke solutions for clients.”

Honor: “Something I have also become increasingly cognisant of is the need to interact with clients in a way that they will understand. There has been a tendency historically for distribution people to use unnecessary financial jargon which is unrelatable to clients and can be misleading. Much more focus and thought are now required from a marketing perspective. The diversity initiative is also increasingly vital to make the profile of investment personnel reflect the client demographic they are servicing so that we can communicate and relate to clients in a positive and impactful way. This is not just about gender diversity, but about background (income etc) neuro-spectrum, culture and sexuality. We need to think more laterally about taking people who don’t fit the traditional profile who can bring in their own diverse skills and experiences into a team to improve client experience.”

Amanda: “In what ways do you think Covid-19 will change and have an impact on the way distribution personnel do business in the future?”

Honor: “I can’t imagine going back to how it was! The best thing that has come out of Covid-19 is that it’s proven that we can do so much virtually, without being in the office or travelling. However, being ‘People People’, the team miss interacting on a day-to-day basis with colleagues and clients. Specifically, in terms of sales, body language is vital, especially regarding reading and understanding a person. We have been able to secure new deals without meeting in person and travelling but it is undeniably more challenging to build rapport and trust with new prospects virtually.”

 Amanda: “As a final question, when thinking about how you position and build distribution over the next period at LGIM – what’s on your mind and what will you look to do differently?”

Honor: “There is a focus on growth across the board for LGIM. We are always thoughtfully looking to add talent both in the UK and in Europe. Monitoring talent internally within LGIM and the wider group is also important. Legal & General look to promote movement of high performers around the group as much as possible to retain and develop employees. It’s all about development of existing people, growth into new markets and striving to be the asset manager that the client deserves and that they will be first to pick up the phone to.”

Thank you again to Honor who kindly gave up her time to provide us with these insights.

 

Beaumont Bailey is an international executive search firm and leadership development consultants based in London, offering a range of consulting services working across many sectors.