Following more or less a decade at challenger bank Investec, and as head of asset management for the asset finance division since 2008, John Lindsay found himself looking for a new challenge at the start of 2015.
Following a long career which began on the retail side of the motor industry, before stints at Avis Fleet Services (which became GE Fleet Services), and CitiCaptial (a precursor of Lex Autolease), Lindsay had experience in a number of areas in auto and asset finance.
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As a result, he felt the time was right to set up a consultancy business, which he did soon after Easter in April.
At the time he saw a gap in the market. Lindsay says he feels the industry has lost a lot of the expertise following the recession that hasn’t come back. This has become increasingly important as the FCA has begun its process of regulatory reform, leaving the industry in a much more heavily regulated state than before.
Initially his new company, JLSR, focussed on the asset finance and leasing, automotive and transport sectors. However in its short existence, Lindsay says he’s found a number of the skills he learned in these sectors can be used in other areas as well, particularly with regards to business strategy and operational improvement. As a result, the business has been realigned, so it also speaks to potential clients from mid-sized businesses with turnovers of between £20m and £75m.
Within motor finance, JLSR has so far worked with a high-end motor finance provider, to help it with its corporate governance of asset risk.
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By GlobalDataWhen looking at corporate governance, FCA regulation is highly relevant, and Lindsay says this is something businesses need to be aware of: "It’s a case of making sure they’ve got the right business plan documented, and clearly stating how they’re going to be able to deal with things like customer complaints and interacting with customers. Also, how they’ll deal with people who are suffering from financial duress, and making sure they’re aware of what they can and can’t do around those areas. And making sure they’ve got all that documented, and making sure they’ve got staff training to ensure front line staff are aware of what they can and can’t do and say."
This is a just the start. Ultimately, Lindsay says, the company will need to have processes in place to be able to measure what its sales staff are doing, and that it’s selling to the customers in the right way. He adds: "Also they need to make sure they’ve looked at how the staff have been incentivised as well, to ensure that it’s appropriate for the job that they’re doing in the context of the new FCA world, if you like."
Remuneration
This touches on remuneration, of which the FCA is currently conducting a thematic review. A number of motor finance lenders have looked at remuneration since the FCA began regulating the environment. However it’s still an area that’s developing.
Lindsay says not all lenders are currently fully prepared. He says: "A lot of customers still aren’t satisfied with the service levels they’re getting from certain dealers at certain levels. The problem is dealers are there to sell vehicles, and historically have done what they’ve needed to do to sell vehicles, and that’s got to change because of the new FCA regulations if they’re selling motor finance to a customer. If they don’t change, it could lead to a very expensive mistake.
"I feel there are organisations out there which aren’t as far up the curve as they should be, quite frankly. Some are and some are thinking ‘it might go away’ and burying their head in the sand."
According to recently changed FCA regulation, companies will have to log every complaint they receive with the FCA. While this may prove a challenge, Lindsay says the first order of business for most companies has to be defining what is and isn’t a complaint.
He says: "If a customer rings up a maintenance department and says ‘my car was in for service last week, but the indicator isn’t working’ – is that a complaint or is that not a compliant? If you start listing complaints like that, they’ll need a list as long as their arms.
"If they’ve got a serious service complaint, or it’s a merchantable quality complaint, or they feel they’ve been mis-sold something on their finance, then those are the types of complaints which they’ve got to log and file a report with the FCA."
The first few months has seen JLSR work with a number of companies on projects, and Lindsay says there are more being planned. To cope with the new business JLSR has taken on an extra associate, and there’s a good chance a second will be taken on in the near future.
Looking at the business’s near to medium-term plan, Lindsay says: "It’s about trying to grow sensibly and sustainably, and in line with what the market demands, without piling loads of people into the business.
"I’ve planned for it to take time to get some real traction through the business, so it’s a question of being patient, working hard and getting out there to meet lots of people, which is what we’re doing."
Working with Students
A part of the new consultancy involves regular work with school students not intending to go to university. Lindsay says: "I’m looking to engage with industry bodies like the Institute of the Motor Industry, local schools and colleges, aimed at leavers who aren’t necessarily thinking of university going forward in their career.
"It’s to provide them with some mentoring and a forum in which to discuss their ideas and find out what the world is like for finding jobs, their options, and what they need to do.
"It’s something that’s becoming increasingly relevant now. Apprenticeships are good options. But not enough kids know about it and it’s not getting down to the grass roots level, and that’s where it needs to start. The motor industry is a classic example. It’s still got an image of being a grease monkey type industry. It’s not anymore – you need to be very IT literate. In Germany, for example, it’s held in much higher esteem, and the motor industry in particular will continue to have a huge problem with a skills shortage, because it’s not able to recruit the right calibre of person. The Institute of the Motor Industry is doing good work to try to address this."
