The Times

The Times

Financial adviser who stood up for investors, loved an argument and was gagged by Equitable Life before it went out of business

Alan Steel knew his campaign against overcharging by financial advisers was hitting home when competitors begged his staff: “Can you not get him to shut up? He’s ruining my business.”

Never short of opinions, especially about other people’s opinions, Steel saved the UK public millions of pounds by saying the unsayable.

“I find mis-selling f***ing despicable,” Steel said. “There has been this culture of salesmanship that has been rewarded for far too long. In law, the law of agency, I am the agent of my client. My primary responsibility is to the client: that is the letter of the law.”

A financial adviser himself, he took on opponents large and small if he thought they were fleecing customers. Among his biggest victories was over the attempts by Equitable Life to evade its obligations.

He refused to move his firm, Alan Steel Asset Management, from Linlithgow, the small town 20 miles west of Edinburgh that was the birthplace of Mary, Queen of Scots. Like the billionaire Warren Buffett, who has stayed based in Omaha, Nebraska, he believed that being away from the big financial centres gave him a clearer perspective and helped him to avoid becoming too close to the establishment.

Steel denounced several heavily promoted complex products that he claimed enriched the industry at the expense of the public, including endowment mortgages, with-profits bonds, income drawdown, and split-capital investment trusts.

He was one of the earliest critics of Equitable Life, which extracted savings from many prominent lawyers, politicians, actors and journalists on promises of profits it could not deliver. The firm took legal action to gag Steel for several years before the House of Lords ruled against it in 2000, effectively forcing it out of business.

“Policyholders are still being seduced into new pension plans that appear at first glance to the unsuspecting to be manna from heaven,” he said immediately after that ruling. “My advice would be, get your money out now. This is guerrilla warfare and Equitable Life is trying to use smart bombs. I would advocate using SAS tactics by doing a dawn raid to get your money out.”

Steel was at odds with the Financial Services Authority (now the Financial Conduct Authority), which controversially let Equitable continue selling new business in the hope that it might be bought as a going concern. Even more savers lost money.

“They should actually go out and visit experienced IFAs [independent financial advisers] and listen to how to be proactive, and work with us,” he said, “to properly regulate the industry for the benefit of savers and investors, instead of theorising and making the same mistakes.”

Sir Howard Davies, then the regulator’s chairman, allegedly could not stand being in the same room as Steel.

A burly man with the build of a rugby forward, Steel loved an argument, particularly over dinner tables supplied with rioja. He blamed the authorities for favouring the big financial groups at the expense of small firms, and for their failure to get to grips with abuses.

“If you wanted to stop mis-selling,” Steel said, “it would be easy: cut a 17-page disclosure document down to one page and back it up with random secret shoppers checking what advisers are saying, and whether they are telling people in advance that thousands of pounds of commission is coming out of their pocket.”

He did not win all his arguments. He took the side of fund managers against the so-called tracker funds, which automatically track stock market indices and became popular because they normally charged investors less. “I’m concerned that those investors rushing headlong into UK index trackers because they’re cheap will also find themselves cheated,” he said.

Steel also stood by Neil Woodford, a former star stockpicker, who was widely criticised after thousands of investors lost money in his funds.

He was always on the lookout for fresh pitfalls. “Any way you look at bitcoin, you have to conclude at this stage it looks like a speculative rollercoaster,” he said this year. “Some early adopters have done very well but if clients want in, it is naught to do with me.”

Alan McKay Steel was born in Bo’ness, West Lothian, in 1947, the only child of Alan Steel, a bricklayer, and Laura (neé McKay), a bookkeeper in a solicitor’s office. He credited Laura, who always regretted having to leave school at 14, with giving him the drive to become the first in his family to enter university.

When Alan was six the family moved a few miles south to Linlithgow. He attended primary school there, then Linlithgow Academy. He claimed his only sporting achievement was the Linlithgow Academy long jump record: 3 hours 20 minutes.

After leaving Edinburgh University with a degree in geography and maths, he decided he was “bored with maps”. A friend told him he could make money as an actuary, so he joined Scottish Widows. “I hated it,” he said. “I failed the medical when they found out I had a sense of humour. Being an actuary is all about systems and numbers and processes, whereas what I enjoy is people.”

He had little time for his old employer. In 2001 he said: “Their biggest problem has been consistent mismanagement over the past 50 years. It’s not a place where creativity blossoms.” But that early training gave Steel the skills to analyse and highlight poor financial products.

At university he met his first wife, Margaret, to whom he was married for 25 years. They had two children, Malcolm and Catherine, who work for Margaret’s financial advice firm in Edinburgh. Steel was introduced to his second wife, Frances, a chartered tax adviser, by a mutual client, the Scottish financier Sir Charles Fraser. They married in 1999.

In 1973 Steel qualified as an independent financial adviser before starting his own business two years later. He moved into an office given to him by his old school friend Donald Ford, a former Hearts and Scotland footballer with an accountancy practice on Linlithgow High Street. Steel’s company now has ten financial advisers and 30 support staff, looking after 3,000 clients and £1 billion. He and the firm have been big supporters of Linlithgow charities.

Steel’s dry wit and comic timing earned him many invitations as an after-dinner speaker. He kept a boat, Wee Molly, at Port Edgar marina under the Forth Bridges, and relaxed with “my family, music, my moothie [mouth organ], Ibiza, red wine and Oliphant’s pies”. Oliphant’s is a Linlithgow baker.

His biggest piece of advice for making money was “keep your eye on lighthouses and not the fog.”

Alan Steel, financial adviser, was born on February 22, 1947. He died of complications resulting from Covid-19 on September 15, 2021, aged 74

Bill Kay