Creating Career Optionality: Iain Allan's Personal Journey

Iain Allan is now in his 70s, and shows no interest in retirement. He qualified as an actuary and spent his career in investments and banking. He took a strategic approach to his career, actively managing it to create and capitalise on opportunities at key points over the decades. Most recently, he has been encouraging more actuaries globally to consider career opportunities in banking, promoting this through the International Actuarial Association. 

Iain Allan on a summer evening in the countryside (Surrey, England)

In the investments domain, a financial option is an instrument which allows you to adjust the downside or upside potential of a given investment. One example of this is reducing or removing the chance of loss while retaining or enhancing the chance of gain. This ‘optionality’ allows you to benefit if things move in your favour. And, options are more valuable in uncertain situations (with ‘volatility’), when the path ahead is not clear – adapting as things evolve. 

A related concept in the world of bond (or fixed interest) investments is ‘convexity’, which involves rates of change. Simplistically speaking, convexity allows you to benefit whichever direction interest rates move – the best of everything! So, if you’re able to proactively steer your situation to give you optionality or even convexity, that’s incredibly helpful. 

Iain and John Young (one of his proteges) have written about the importance of creating strategic options, using examples from warfare and business. In their words: “Success comes from exploring many options and following up those that work best”. Read more for Iain’s career experiences and reflections, including his application of optionality in practice. 

Starting Out in Investments
Iain began his career at a mutual insurance company in Edinburgh: Scottish Life, over fifty years ago. Soon after he joined in 1969, a young actuary left, and Iain was assigned to replace him as bond fund manager, even though he was still an actuarial student. In this role, Iain learned a lot about markets and economics. 

Because he felt that this role gave him more options for his future career, including the option to move to London, he declined the standard rotation to other departments expected of students, remaining in this investments role for a number of years. 

Stockbroking and Entry into Banking
In 1979 the UK government led by Margaret Thatcher abolished exchange controls. Iain approached the stockbroker Phillips & Drew to help them develop their business outside the UK. Through this role, he gained experience in the ‘sell side’ of investments, adding to his existing ‘buy side’ knowledge. He also got international exposure through contact with central banks and large financial institutions in many countries globally, including Japan. 

The stockbroker was bought by the multinational UBS in 1985 (ahead of ‘Big Bang’ – deregulation of the UK financial markets). Iain assessed that his role heading Phillips & Drew’s international business did not make sense within a large international bank, and, approaching 40, he felt he should look for options to move into a management role in the wider bank. So, he offered to go to Tokyo for a while and obtain the securities branch licence UBS desired to complement their other Japanese activities. After two years there, he returned to London to lead the integration of UBS London and Phillips & Drew’s bond activities. 

From Investment to Commercial Banking
While in Tokyo, Iain interacted with different UBS business units, and he saw varied interesting opportunities across banking. He decided he did not want to be limited to investment banking. So, he approached Sir George Mathewson, the new CEO of the Royal Bank of Scotland (RBS), about joining RBS in the Group Strategy function in Edinburgh. He pointed to his successful leadership of various initiatives at Phillips & Drew and UBS. Iain also explained that, given his professional qualifications, he had a good understanding of financial risk management. 

Sir George’s philosophy was that RBS should have a small set of strategic themes and be open to new possibilities for growth that arose, where consistent with the strategy approved by the board. This ensured that the bank built on areas of competitive advantage, while retaining flexibility to capitalise on opportunities. 

My job is not to predict the future. My job is to ensure that the bank can be successful, whatever future lies ahead.”
SIR GEORGE MATHEWSON

Joining RBS gave Iain the opportunity to work in commercial banking i.e. retail (personal and SME) and corporate banking. As Group Director, Strategy, at RBS, Iain worked with Sir George on the bank’s strategic options, including its multi-brand, multiple channel strategy in retail banking. For example, RBS kept both its supermarket banking joint venture with UK retailer Tesco and its credit card joint venture with US bank Advanta separate, and allowed them to compete with its own branch-based activities.

This flexible strategic approach was successful, and it enabled RBS to acquire the much larger English bank NatWest in 2000. After the acquisition, the separate brands were retained, enabling the bank to offer different customer propositions. Internationally, RBS entered a strategic alliance with Banco Santander (until Santander bought Abbey National in the UK) and, as Asia’s global influence grew, a strategic partnership with Bank of China.

During the 2000s, Iain hired John into the Strategy function at RBS. They emphasise that strategy also involves making hard choices of what NOT to invest resources into. Whether in our businesses or in our careers, strategic options should be in related areas, where we have competitive advantage. We should also have sufficient resources to capitalise on them where they show promise. The danger, where we don’t nurture options, is that we are betting everything on our existing approach i.e. gambling for total success or total failure. 

The Rise of Fintechs
After RBS, Iain shifted into a consulting career, including advising neobanks and fintechs on their business strategies and banking licence applications. He remains a champion for risk management professionals applying our skills in the worlds of investment and commercial banking, whether at established institutions or at new challengers. 

Reflections on Change
Reflecting on career planning and the changes he’s observed over his working life, Iain notes that fifty years ago, jobs would typically be ‘for life’. Moves between departments in an organisation were often at the direction of the management rather than the choice of the employee – which makes his decision to decline the rotation expected of him at his first employer particularly remarkable! Within the prevailing culture at work at that time, some employees performed consistently well and showed potential, and happened to be in the right place at the right time to get a senior position, although this could take decades to materialise. There was an expectation that loyalty and patience would be rewarded. 

Today, we don’t expect our first jobs to be ‘for life’. We may not have a clearly defined career path mapped out, but we – perhaps unconsciously – think about career optionality. We are willing to enhance and broaden our skills, take advantage of opportunities when they arise,  and even create our own opportunities as Iain did when approaching each new organisation he joined. Iain encourages us all to think deliberately about the power of strategic options in our careers. ​

Fortunately, professional support now exists to help us when considering our career options such as: 

• a step up into a bigger role, 
• a move to a different department or organisation, 
• a switch from industry to consulting (or vice versa), 
• a role at a startup vs a long-established organisation, 
• a career transition between professional disciplines, or 
• a complete career change. 

Iain suggests getting exposure to emerging topics as another way to build optionality – current examples include cyber and conduct risks, or climate change stress testing.