Interview with Mike Newman as Hartmoor launch their first products to market

We caught up with Mike Newman, Director of Structured Products at Target Group, to understand a little more about the launch and the opportunities he sees in the marketplace

What was the thinking behind Target moving into the structured products market under the Hartmoor Financial Brand?

We strongly feel that there is a need for an independent provider who is focused on simple, well-researched product ideas and providing great customer service. Target has already established themselves as a leading provider of outsourced administration services to the investment marketplace, and we saw the opportunity to expand upon this with a move into originations. Having a secure, successful company sitting behind the Hartmoor brand is important, and gives advisers and consumers the confidence that they are dealing with a company that will be in the market for the long term.

How did you approach the development of the new products?

Our goal is to design products that meet genuine customer needs and put the customer at the heart of everything we do. To be successful, we needed to differentiate from the rest of the product providers, which is behind our initial focus on launching deposit plans rather than investments. We felt we could bring something new to the deposits market and offer real consumer choice. We will be adding to the current range of products, we have already conducted customer research and think there are areas we can look to match products with investor appetite. At this stage, it is likely to be more straightforward, simple structured investments keeping true to our design principals.

How did the collaboration with Aldermore Bank come about?

At present, the market is quite crowded and there aren’t a vast number of potential issuers or deposit takers. In my previous role at Investec, we had a strong deposit offering, and were able to serve customers well in this space. Bringing a new deposit taker into the market is a real challenge for a number of reasons – they need to be comfortable with the market, the product, the operational infrastructure, regulations and the provider. Our partner, Aldermore Bank are a successful, growing bank with similar values to Target. More widely, the government has been very supportive of new challenger banks, in a drive to promote and stimulate more competition in the banking space, introducing Aldermore to this market helps underpin their ambitions. As you would expect there was an extremely thorough due diligence process conducted by both parties, but we are delighted to have them as a strategic partner going forward.

What’s the current market view on structured products?

The structured products market has come a long way in the past few years with providers rightly focussing more on customer needs and target market assessment; in the UK, I would say that the market is leading on this initiative. We are certainly seeing greater appetite from advisers, and the feedback we have had so far is really positive as we are offering them choice and diversity of counterparty. Advisers are always looking for something to add to their offering to better serve their customers’ needs, whether that be new products or a more diversified offering. In order to be more accepted, we just need to continue being open and transparent about how they are constructed and what the costs involved are.