Embed Size (px)
Citation preview
www.wealthadviser.coApril 2013
Coverline 1 Coverline 2 Coverline 3
Wealth Adviser Awards 2013
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 2
Contents
Editor: James Williams, [email protected]
Sales Managers: Simon Broch, [email protected];
Malcolm Dunn, [email protected]
Head of Events: Katie Gopal, [email protected]
Chief Operating Officer: Oliver Bradley, [email protected]
Chairman & Publisher: Sunil Gopalan, [email protected]
Graphic Design: Siobhan Brownlow, [email protected]
Photographs: Sarah O’Sullivan
Published by: GFM Ltd, 1st Floor, Liberation Station, St Helier, Jersey JE2 3AS,
Channel Islands Tel: +44 (0)1534 719780
Website: www.globalfundmedia.com
©Copyright 2013 GFM Ltd. All rights reserved. No part of this publication may
be reproduced, stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording or otherwise, without the
prior permission of the publisher.
Publisher
In this issue…03 Wealth Adviser Awards 2013 results
04 Winners strive to embrace new wealth management paradigmBy Sunil Gopalan, Publisher, Wealth Adviser
06 Vestra WealthBest Wealth Manager for Growth Portfolios (UK)
07 Rathbone Investment Management International Best Wealth Manager (Jersey, Guernsey and Isle of Man)
09 St James’s Place Wealth Management Best Private Client Asset Manager (UK)
10 Cheviot Asset ManagementBest Wealth Manager for Balanced Portfolios (UK)
AWARDS 2013
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 3
Results
AWARDS 2013 The winners
Best Wealth Manager for Charities (UK) Newton
Best Wealth Manager for Balanced Portfolios (UK) Cheviot Asset Management
Best Wealth Manager for Growth Portfolios (UK) Vestra Wealth Management
Best Wealth Manager for Income Portfolios (UK) Aberdeen Asset Management
Best Wealth Manager for Alternative Investments (UK) Man Group
Best Wealth Manager (UK) Brooks Macdonald Asset Management
Best Wealth Manager (Jersey, Guernsey & Isle of Man) Rathbones Investment Management International
Best Global Wealth ManagerBlackrock
Best Discretionary Portfolio ManagerSarasin & Partners
Best Private Bank (Jersey, Guernsey & Isle of Man)Nedbank Private Wealth
Best Private Bank (Caribbean) Bank of Butterfield Group
Best Private Bank (Switzerland) Lombard Odier & Cie
Best Global Private Bank UBS
Best Tax Adviser to Wealth Advisers (UK) Deloitte
Best Wealth Adviser for IHT & Succession Planning (UK) Killik & Co
Best Private Client Asset Manager (UK) St James’s Place Wealth Management
Best Financial Advisory Firm (UK) Brooks Macdonald Financial Consulting
Best Private Investment Office (UK) Lord North Street Private Investment Office
Best Technology Vendor (Global) SEI
Best Law Firm (UK) Linklaters
Best Family/Matrimonial Law Firm (UK) Withers LLP
Best Offshore Law Firm (Jersey, Guernsey & Isle of Man) Carey Olsen
Best Offshore Trust Company (Jersey, Guernsey & Isle of Man) Hawksford International
Best Trust Company (UK) Wealth Division, RBS
Best Trust Company (Caribbean)Winterbotham Trust Company Ltd (Bahamas)
Best International Trust Company Maples Fiduciary Services
Best Accountancy Firm (UK)Grant Thornton
Best International Accountancy FirmPwC
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 4
announced the acquisition of Morgan Stanley’s EMEA private client wealth management business, and also announced it was selling its stake in JO Hambro Investment Management to Bermuda National Limited.
In the past few months Schroders acquired Cazenove Capital, Brooks Macdonald acquired fund manager Spearpoint in the Channel Islands, Rathbone Investment Management International acquired AIB Jersey, Standard Life Wealth acquired Newton’s private client business, Handelsbanken purchased Heartwood and Julius Baer acquired Merrill Lynch’s International Wealth Management business outside the USA from Bank of America
These recent deals throw up two clear trends – the requirement to scale-up in terms of client assets under management, and the need to focus closely on regional groups
The array of winners who gathered in London’s Mayfair last month at the Wealth Adviser Awards 2013 demonstrate recent changes in the ranks of wealth managers, with established private banks and advisers rubbing shoulders with some relative newcomers.
The winners of these peer-to-peer awards include fully-fledged global private banks, regional private banks, fast-growing independent wealth managers, advisers and service providers from around the world, united in their determination to deliver market-leading products and services to their clients in an increasingly volatile and rapidly changing marketplace.
The changes can be witnessed most clearly at the top of the market, where consolidation and realignment are gaining pace and scale. Last month Credit Suisse
Winners strive to embrace new wealth
management paradigmBy sunil Gopalan, Publisher, Wealth Adviser
OveRv i eW
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 5
OveRv i eW
of HNWI clients with similar product and service requirements.
What is driving these trends? In terms of growing assets under management, industry estimates suggest that while total AuM has grown post-2008, the costs associated with managing those assets have risen faster than the growth in income.
According to the Capgemini-RBC Wealth Management World Wealth Report 2012, the cost-to-income ratio of the global wealth management industry stood at 79.8 per cent in 2010, up from 63.7 per cent in 2007, reflecting a consistent rising global trend.
The report states “That trend is clearly exacerbated by the inability of firms to generate significant fees when interest rates are low and investors are favouring capital-preservation products. To improve overall profitability, firms need to seek out new ways to control and reduce their costs while growing AuM.
“And even as profit margins are being eroded, rising levels of adviser remuneration make it expensive to acquire and retain successful advisers who are key to bringing in and managing clients and assets. Other costs are also high, with expensive real estate locations, and high technology and compliance costs all taking their toll on the bottom line.
“Some regulatory measures have affected funding costs, and some are even targeting business models. The UK’s Retail Distribution
Review (RDR) is designed to improve transparency and reduce fees, but essentially shifts the industry income structure from a primarily commission-based approach to a more fee-based approach.”
The timing of the RDR and regulations such as FATCA couldn’t be worse for some firms. In its 2012 report ‘UK Wealth Management at the tipping point?’ KMPG noted “The ever increasing volume of regulation and the increased intrusiveness of the regulators will have profound impact on both the structure of supply and on clients: the historic attractiveness of Wealth Management as a low risk, low capital, highly liquid sector will be diminished materially.”
KMPG says the direct commercial impact of vaulting regulatory costs, both of compliance and implementation, will take the form of:• Erosion of wealth management earnings• Firms existing the sector• Firms withdrawing products and services
or ceasing to deal with certain client segments
• A lowering of sector attractiveness and lack of new entrants.
The markets have been volatile post-2008 and political conditions have complicated wealth strategies even more.
With heightened volatility even in traditional safe-have investments such as gold, and a high level of correlation between 8
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 6
vestRA WeAlth
Vestra WealthBest Wealth Manager for Growth Portfolios (uK)
Based in the heart of the City of London, Vestra Wealth has over 150 staff, of which 24 are Executive Partners. Each of its investment managers has an average of more than 20 years’ industry experience. Working side by side with wealth planners and client advisers, Vestra Wealth brings the full capabilities of the firm to bear on each client to manage their investment portfolios.
To that end, clients can choose from three portfolio management services provided by Vestra, depending on the extent to which they wish to be involved in the management of the fund portfolio. These three services include: Discretionary Portfolio Management Service (full delegation given over to Vestra Wealth); Advisory Portfolio Management Service (for clients who wish to be involved more in the investment strategy and decision-making process), and Execution-Only, where clients retain full control over their investments.
At the heart of the investment process sits the Investment Committee, which serves to disseminate the macro-led tactical views which each investment manager then uses to construct their clients’ portfolios as per their individual investment needs.
Generating consistent growth in portfolios has been challenging in recent times given the extent of central bank intervention. In order to help its clients maximise total returns, Vestra has structured portfolios to generate income from local currency emerging market debt and selective high-yield bonds, explains Jenny Tozer, investment manager and Chair of the Investment Committee. In addition, portfolios have been structured “to generate capital growth via a core selection of global, high quality dividend paying companies, together with investments in global macro and event driven alternative investments.”
Tozer confirms that equities remains “our asset class of choice”, confirming that the Investment Committee’s preference is for small- and mid-cap US stocks, global “high
moat” dividend companies, the Asia Pacific consumption story and selective European export companies. “We remain cautious on Europe, selectively optimistic on the UK and overall cautious on emerging markets ex Asia Pacific in the short term. Japan may well continue its rise, but we remain underweight given the very poor macro economic fundamentals,” says Tozer.
Within fixed income, Vestra remains cautious on all government debt and has begun to reduce its exposure to investment grade and high-yield bonds, except for lower quality, investment grade financials. But as alluded to above, sentiment remains positive on local currency emerging market debt.
One area that Tozer believes could perform well over the next few years is global infrastructures as governments in both developed and developing economies restructure for growth. “This asset class also provides some inflation proof and yield protection. We remain cautious and underweight on commodities given both the current supply side issues and demand constraints.”
Vestra Wealth has an extensive and experienced regulated and unregulated fund research team. This, explains Tozer, provides the firm with the ability to generate significant alpha within its portfolios, who, when asked to define what sets Vestra apart from its peers, responds: “Consistent performance, a focus on risk-adjusted total returns underpinned by a rigorous and flexible top down and bottom up asset allocation process.”
On winning the award, Tozer says: “We are honored to have won the award, especially given the very tough trading conditions last year and the high calibre of our peers in this sector. Last year was not an easy year to manage growth portfolios. Flexibility and nimbleness were key differentiating factors amongst the investment managers.” n
Jenny Tozer, investment manager and Chair of the Investment Committee at Vestra Wealth
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 7
RAthBOne investMent MAnAGeMent inteRnAt iOnAl
Rathbone Investment Management International
Best Wealth Manager (Jersey, Guernsey and isle of Man)
With a heritage dating back to 1742, 11 offices spanning the UK and an offshore presence in Jersey, 190 experienced investment professionals and approximately 35,000 clients, Rathbone Investment Management (part of Rathbone Brothers Plc) is one of the UK’s largest and most well established wealth management firms.
Last year, despite challenging market conditions, Rathbones increased its funds under management by 13.4 per cent to GBP18billion. Commenting on the firm’s results for 2012, Andy Pomfret, Chief Executive of Rathbone Brothers Plc, said at the time: “Rathbones continues to grow and consolidate its position as a leading provider of high-quality, personalised discretionary investment management services.”
Indeed, the total net annual growth rate of funds under management for Rathbone Investment Management was 6 per cent, comprising GBP0.48billion of net new inflows, compared to GBP0.31billion in 2011, and GBP0.44billion of net organic growth.
A key contribution to net inflows stemmed from the private client acquisitions of R.M. Walkden & Co. in April 2012 and AIB Jersey in October 2012. “Whilst not the largest deal, the AIB transaction consciously added investment skills, client relationships and assets to the Jersey company’s ongoing growth,” comments Jonathan Giles, who heads up the Jersey office.
Asked why he thought Rathbones was successful in the acquisition of AIB, Giles adds: “With any client that comes to Rathbones it’s about a cocktail of ingredients: investment and client focus, service culture, clarity and certainty of our business goals and in this instance, Jersey’s offshore and international experience and focus.”
Rathbones’ DNA has previously been articulated as ‘heritage, stability, stewardship and trust’. In reality, says Giles, it is built
around “common sense judgment, integrity of advice, collective experience, and individual client focus”.
Rathbone Investment Management International was established as a regulated Jersey company in 2002. Last year’s 10th anniversary party was attended by around 200 clients and professional intermediaries. The firm has enjoyed double-digit organic asset growth rate and seen assets in its offshore funds umbrella, RIMI Strategies, increase by almost 60 per cent confirms Giles.
Even though the markets are showing signs of a recovery, client uncertainty remains high. “However, I firmly believe that our institutional size – we now manage close to GBP20billion – married with our ability to truly tailor our service to individual client needs has hit a ‘sweet spot’. We can offer clients a focused and substantial investment management resource, independent advice and a skilled and proven offshore investment team,” says Giles.
Over the past six to nine months, Giles has observed an increasing desire among the firm’s clients to target shorter-term returns and to be involved through advisory mandates. “Diversification remains central to their thoughts with a focus on blending market risk and lower correlation; what a couple of our clients have called ‘their cake and eat it strategy’. Good or bad humour aside, they are asking for simple and transparent solutions to an increasingly complex world.”
On winning the award, Giles concludes by saying: “We were delighted to have won the award, given the breadth of Wealth Adviser’s international readership. Awards that reflect the thoughts and actions of clients and their advisors are always a fillip to staff and ensure that we continue to focus on the challenges at hand.” n
Jonathan Giles, Head of Rathbone Investment Management International’s Jersey business
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 8
OveRv i eW
11
asset classes, it has become challenging for wealth managers to develop effective diversification strategies and provide profitable wealth management products and services to their clients.
Understandably, there has been a lot of caution among investors in recent times because of events in the eurozone. But while the emerging equity market rally is leading to increased risk on sentiment, Cheviot Asset Management’s CIO Alan McIntosh makes the point that if recent issues in Cyprus “have taught us anything, it is that we are not out of the woods yet. As a result, we believe a diversified portfolio is still the right path for the majority of clients.”
Having a flexible approach and an ability
to make and implement decisions quickly has helped the firm exploit opportunities and generate strong, consistent returns for its clients. “Each of Cheviot’s clients is assessed on an entirely bespoke basis and has a portfolio built to suit their needs. It is this personal service that sets us apart and it remains our key strength,” notes McIntosh. Cheviot won the Wealth Adviser award for Best Wealth Manager for Balanced Portfolios (UK).
Generating consistent growth in portfolios has also been challenging in recent times given the extent of central bank intervention. In order to help its clients maximise total returns, Vestra Wealth, which won the Wealth Adviser award for Best Wealth
5
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 9
St James’s Place Wealth Management
Best Private Client Asset Manager (uK)
St James’s Place Wealth Management has built a solid reputation in wealth management services since it was established by Sir Mark Weinberg, Mike Wilson CBE, and Lord Rothschild in 1991. A FTSE 250 company, the firm currently manages over GBP34 billion of client assets.
“We are committed to helping clients manage their wealth in a way which reflects their personal circumstances, now and in the future, by putting them firmly at the centre of everything we do and providing personal face-to-face wealth management advice they can trust,” comments Tony Dunk, St James’s Place Marketing Director, when asked to describe the firm’s company philosophy.
Indeed, at the heart of the firm are its advisers, known collectively as the Partnership. With an average of 18 years’ industry experience. The focus they bring is clear: to provide clients with robust financial advice, involve them in every single decision, and foster long-term working relationships.
“Our Partners focus on maintaining long term face-to-face relationships with their clients who can be secure in the knowledge that the advice is backed by a FTSE 250 company. Our business model includes succession planning, ensuring our clients have support and service over the years to come. With many organisations now withdrawing their client-facing advisory services, we firmly believe that face-to-face advice, supported by regular communication, will continue to help our clients make well-informed decisions,” says Dunk.
St James’s Place works closely with clients to provide a comprehensive and dedicated wealth management service, ranging from retirement planning through to estate preservation and protection, working with a number of best-of-breed providers in the industry.
This service also includes their distinct
approach to investment management, designed to help clients build investment portfolios and access an extensive range of funds. St James’s Place does not employ its own investment managers. Instead, all investment managers are externally chosen: the responsibility of which falls on the firm’s Investment Committee. The Investment Committee is advised by leading investment research consultancy, Stamford Associates. This sets the firm apart from others. It is, in effect, providing clients with two layers of due diligence.
Each manager’s investment style and strategy is carefully considered before the Investment Committee adds a new fund to the portfolio. Performance is continually monitored. If confidence in a manager is lost, they will be replaced. A written report is provided to clients every six months, detailing the investment steps taken and any changes made.
“Our clients now have access to over 30 high-quality investment managers from around the world,” confirms Dunk. “The view of our Investment Committee is that a broad diversification across asset classes, geographies and investment management styles within an investment portfolio will serve to mitigate risk and help our clients achieve their financial goals.”
Looking ahead for the rest of 2013, Dunk comments: “We have good momentum across all aspects of the business and are therefore confident in our ability to continue our growth in line with our medium term objectives in 2013 and beyond.”
On winning the award, Dunk concludes: “We are all delighted as the award serves to validate our approach to wealth management and the importance we place on client relationships. I would particularly like to thank all Wealth Adviser’s readers who supported us.” n
Tony Dunk, Marketing Director at St James’s Place
st JAMes ’s PlACe WeAlth MAnAGeMent
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 10
Cheviot Asset Management
Best Wealth Manager for Balanced Portfolios (uK)
Alan McIntosh, Chief Investment Officer at Cheviot
this has been a major contributor to client performance.
Understandably, there has been a lot of caution among investors in recent times because of events in the eurozone. But while the emerging equity market rally is leading to increased risk on sentiment, McIntosh makes the point that if recent issues in Cyprus “have taught us anything, it is that we are not out of the woods yet. As a result, we believe a diversified portfolio is still the right path for the majority of clients.”
One important area that has provided diversification benefits has been infrastructure, with McIntosh noting that infrastructure funds within client portfolios have produced strong yields and helped performance.
With respect to fixed income, finding good quality yielding assets “has perhaps been the biggest challenge we have faced,” notes McIntosh. “With gilts looking expensive and at risk of interest rate rises, we have been looking for other opportunities to exploit. To this end, we have invested in selective corporate bonds on a direct basis and we have also used convertible and strategic bond funds successfully.”
Having a flexible approach and an ability to make and implement decisions quickly has helped the firm exploit opportunities and generate strong, consistent returns for its clients. “Each of Cheviot’s clients is assessed on an entirely bespoke basis and has a portfolio built to suit their needs. It is this personal service that sets us apart and it remains our key strength.”
On winning the award, McIntosh says: “It is always fantastic to receive recognition for strong performance in what has been an incredibly tough environment for investors. We hope that it won’t be the last and that we can build on this success as we enter into a new chapter with Quilter.” n
London-based Cheviot Asset Management was established in 2006. In January 2013, the firm merged with fellow discretionary investment manager, Quilter & Co. to form Quilter Cheviot. Combined assets under management in the firm total more than GBP12billion (as at end January 2013).
Cheviot’s investment process combines fundamental bottom-up and top-down analysis with flexible asset allocation. Overseeing the process is the Investment Committee, chaired by William Eason, and which includes Alan McIntosh, Chief Investment Officer, and other senior colleagues.
With respect to investment in direct equities, rigorous fundamental research and quantitative analysis is employed, as well as regular contact maintained with senior company executives. In terms of fund selection, Cheviot insists on meeting every manager it plans to invest with before allocating capital to any given fund. Performance reviews are then ongoing, ensuring that clients’ best interests are constantly upheld.
Given today’s perniciously low interest rate environment, McIntosh tells Wealth Adviser that one of the ways Cheviot has helped manage the balanced portfolios of its clients has been to avoid gilts: “For the past 18 months, at least, we have been positive on high-quality, yielding equities which are able to pay progressive, well covered dividends. Gilt yields have fallen to record lows over the period and are currently trading on negative real yields. As a result, we have been avoiding gilts and supporting quality corporate bonds.”
With respect to equities, McIntosh confirms that the portfolio has been “overweight for a considerable time” and has benefited from the rally in equity markets;
Chev iOt Asset MAnAGeMent
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 11
Manager for Growth Portfolios (UK), has structured portfolios to generate income from local currency emerging market debt and selective high-yield bonds, explains Jenny Tozer, investment manager and Chair of the Investment Committee. In addition, portfolios have been structured “to generate capital growth via a core selection of global, high quality dividend paying companies, together with investments in global macro and event driven alternative investments.”
Jonathan Giles, who heads the Jersey office of UK’s Rathbone Investment Management, says, “I firmly believe that our institutional size – we now manage close to GBP20billion – married with our ability to truly tailor our service to individual client needs has hit a ‘sweet spot’. We can offer clients a focused and substantial investment management resource, independent advice and a skilled and proven offshore investment team.”
Over the past six to nine months, Giles has observed an increasing desire among the firm’s clients to target shorter-term returns and to be involved through advisory mandates: “Diversification remains central to their thoughts with a focus on blending market risk and lower correlation; what a couple of our clients have called ‘their cake and eat it strategy’. Good or bad humour aside, they are asking for simple and transparent solutions to an increasingly complex world.” Rathbone Investment
Management International won the Wealth Adviser award for Best Wealth Manager (Jersey, Guernsey and Isle of Man).
But not all wealth managers can take this flexible and bespoke approach and as result, some may suffer in the months ahead. As KPMG notes: “This is an industry with limited experience in implementing transformational change. Should there be a major market correction, a mere 15 per cent decline in revenues would push around 29 per cent of wealth managers into a loss.”
Another challenge is communicating these products and services to clients without confusing them with too much noise. The efficient use of technology can be a key differentiator here with firms such as St James’s Place Wealth Management, which won the Wealth Adviser award for Best Private Client Asset Manager (UK), distributing iPads to its 1,800 Partners to enhance the depth and quality of their client presentations, backing this with an array of multimedia presentation tools.
The second trend outlined previously is the focus on regional groups of HNWIs. It is increasingly difficult for most wealth management firms to operate on a truly global basis given the cost constraints they face. And, the growth of wealth in some domestic markets makes overseas expansion unattractive for some domestic wealth managers.
Tony Dunk, Marketing & Investor
8
OveRv i eW
Wealth adviser aWards Special Report Apr 2013 www.wealthadviser.co | 12
OveRv i eW
the UK and Australia being beneficiaries of this move as witnessed by the rising demand – and prices – for prime London and Sydney property, along with alternative and portable investments such as fine wine, art, classic cars, rare stamps and watches.
This means that wealth management firms need to respond with a pooled skills approach – bringing in experts where required – or develop multi-disciplinary skills in-house to service these diverse investment requirements.
KPMG also notes that “firms are responding to costs and revenue pressures by focusing on more profitable clients, in at least one of two ways:• Identifying profitable clients, segmenting
by value, remodelling proposition and service packages to suit client type, rationalising unprofitable clients and focusing on attracting and retaining wealthier clients.
• Seeking greater share of wallet by cross-selling a broader range of services and products.
“The first route will be favoured by mono-line Private Client Investment Managers (PCIMs) as their chief route to scalability, while private and universal banks will attempt both routes to increase their share of wallet of more profitable clients.”
The Wealth Adviser Awards 2013 showcase wealth managers, advisers and service providers who are already focused on realigning their business models to deal with these many challenges, and to profit from consolidation, strong investment models and significant investment in technology. n
Relations Director at St James’s Place Wealth Management, who delivered the opening address at the Wealth Adviser Awards 2013, said RDR has proved a mixed blessing to the firm, driving IFAs struggling to stay independent to its doors, attracted by its centralised multi-service model and its use of external managers.
Dunk believes there is enormous untapped potential for growth in the UK market, given the low interest rate environment and the significant volume of bank deposits and household wealth.
Indeed, the growth of global household wealth is unstoppable. As Credit Suisse Research reported in its Global Wealth Report 2012: “Despite the financial crisis, global household wealth increased by USD 109 trillion between 2000 and 2012.”
Credit Suisse estimates that global net worth per adult will reach USD 67,000 by 2017, an increase of almost 40 per cent relative to 2012. And total household wealth is projected to rise almost 50 per cent (equivalent to 8 per cent per year), from USD 203 trillion in mid-2012 to USD 330 trillion by mid-2017.
China is expected to surpass Japan as the second wealthiest country in the world by 2017, and the USA expected to maintain its leading position, with France and Germany in fourth and fifth place respectively, according to Credit Suisse.
The political instability and market volatility witnessed around the world in recent times, combined with the growing trend towards multi-location lifestyles, mean that HNWIs in these countries are increasingly investing their money offshore, with some countries such as
