Profile Financial Services CEO Lena Ridley will step away from the company at the end of the next month, ending a tenure that navigated the company through the Hayne royal commission, the Covid-19 pandemic, and the divestment of its product arm.
Ridley was hired from Pitcher Partners in 2018 by Profile’s then-CEO Sarah Abood, who now leads industry peak body the Financial Advice Association.
Ridley will finish at Profile at the end of November with her next landing spot to be announced shortly after, and the company is currently in the process of appointing a replacement.
Ridley tells Professional Planner that after seven years at Profile “it’s just time” to move on.
“We’ve divested the funds [management] business in September of last year, so that sort of changed the scope of the role and it’s somebody else’s turn get in there and see what comes next with the business,” Ridley says.
“We’ve done some really wonderful things together but it’s just time for a fresh challenge.”
Profile sold its funds management business – a pair of multi-asset, multi-manager managed funds – to WTW last year.
Ridley told Professional Planner at the time that although they received legal advice confirming there wasn’t any regulatory conflict, they felt it was better to follow the “spirit of the law, not just the black letter of the law”.
“The component of managing the funds business just wasn’t part of the role anymore so it looks much more like a traditional advice practice which is how it was intended,” Ridley says.
Ridley says the separation allowed the firm to make sure the advice business had its own “great operating system” around it.
“That become really critical because there’s not this backstop of another part of the business feeding into the profitability of the overall entity,” Ridley says.
“It made us look at our advice business under a microscope and make it even stronger than it even was.”
The only constant is change
Ridley started in financial services in 1999 and has worked in roles covering the spectrum of advice business models from self-licensed businesses to institutionally owned licensees.
“The one constant has been regulatory change over those 25 years,” Ridley says.
“That’s not going to go away, we will continue to roll with it. The next wave will bring a huge amount of opportunity and I’m excited for that.”
Ridley was head of advice at Pitcher Partners before joining Profile in early 2018 as head of operations.
“Sarah [Abood] and I spent many hours in the interview process really connecting over some key issues and seeing the same opportunities in the sector,” Ridley says.
“The opportunity to work with her, the opportunity to work with some really experienced advisers and the board, which had some former Macquarie executives on it, was what had attracted me in the first place.”
The appointment came just as the royal commission got into full swing and looking back on that time – which Ridley says feels like it was a lot longer ago than it actually – she notes the impact varied depending on where you were sitting in the industry at the time.
For Profile, the loss of revenue was minor since they had already moved to fee for service agreements, and there was little impact from the loss of grandfathered commissions.
“It was tiny because we had already made that transition to fees for service so many years, but what the impact was we did a lot of that naval gazing around the funds [business] and whether there was a perceived or actual conflict there…so that was that the impact of the RC,” Ridley says.
“It validated what a lot really great businesses were doing already in the advice space.”
But Ridley says the company still felt the impact of the royal commission. Although it was confident it was doing right by its clients, it was still left with dealing with the advent of new regulations, such as supplying Ongoing Service Agreements and Fee Disclosure Statements.
“That was a massive project that we had to roll through and we took the opportunity to completely review our whole governance framework at the same time,” Ridley says.
“Whilst it was a worthy opportunity to hold the mirror up to yourselves in a very real way, even just OSA and FDS requirements…that was a huge impact in terms of time and money to be able to implement that properly with our clients.”
Back to the future
The practice was once again tested again during the Covid-19 pandemic and Ridley says the business that were already cloud-based were able to adapt quickly.
“That was a real test again,” Ridley says. “A lot of the really great businesses came through Covid with really strong client relationships.”
With plans to remain in the industry, Ridley says she is excited about the next 10 years for advice.
“I think everybody agrees that if we can continue to get those new entrants in which everyone’s starting to think really innovatively about…then it’s going to be a really fabulous age for advice in the next 10 years,” Ridley says.
