Embed Size (px)
Citation preview
www.wealthadviser.coMay 2015
Coverline 1 Coverline 2 Coverline 3
Wealth Adviser Awards 2015
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 2
Contents
Managing Editor: Beverly Chandler, [email protected] Contributing Editor: James Williams, [email protected] Online News Editor: Mark Kitchen, [email protected] Deputy Online News Editor: Leah Cunningham, [email protected] Graphic Design: Siobhan Brownlow, [email protected] Sales Managers: Simon Broch, [email protected]; Malcolm Dunn, [email protected] Marketing Administrator: Marion Fullerton, [email protected] Head of Events: Katie Gopal, [email protected] Head of Awards Research: Mary Gopalan, [email protected] Chief Operating Officer: Oliver Bradley, [email protected] Chairman & Publisher: Sunil Gopalan, [email protected] Photographs: Chris Mikami, www.mikami.co.uk Published by: GFM Ltd, Floor One, Liberation Station, St Helier, Jersey JE2 3AS, Channel Islands Tel: +44 (0)1534 719780 Website: www.globalfundmedia.com
©Copyright 2015 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.
Investment Warning: The information provided in this publication should not form the sole basis of any investment decision. No investment decision should be made in relation to any of the information provided other than on the advice of a professional financial advisor. Past performance is no guarantee of future results. The value and income derived from investments can go down as well as up.
Publisher
In this issue…03 Wealth Adviser Awards 2015 results
04 The rise and rise of the wealth managerBy Beverly Chandler
06 London & Capital Asset ManagementBest Ultra High Net Worth Team
08 Smith & WilliamsonBest Multi-Family Office
10 Quilter Cheviot Investment ManagementBest Boutique Wealth Manager
12 Black Brick Property SolutionsBest Property Adviser
14 St. James’s Place Wealth ManagementBest Private Client Investment Manager
16 Third Financial SoftwareBest Technology Provider
17 KYCme.comMost Innovative Product
AWARDS 2015
The 2015 Wealth Adviser awards at Sketch were filmed. Here is montage of the event itself and the winners receiving their awards
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 3
Results
AWARDS 2015 The winners
The Wealth Adviser Awards 2015 were determined by the votes of Wealth Adviser’s readers, who include wealth managers, IFAs, fund managers, family offices, law firms, accounting firms and other industry professionals.
The winners of the Wealth Adviser Awards 2015 are:
Best UK Client TeamClose Brothers Asset Management
Best International Clients TeamSociété Générale Private Banking
Best HNW TeamRBC Wealth Management
Best UHNW Team London & Capital Asset Management
Best Wealth Planning TeamBordier & Cie (UK)
Best Boutique Wealth ManagerQuilter Cheviot Investment Management
Best Private Client Investment ManagerSt James’s Place Wealth Management
Best Investment Product ProviderTilney Bestinvest
Best Asset Manager – CharitiesCazenove Charities
Best Asset Manager – Cautious PortfoliosKames Capital
Best Wealth Manager – Growth PortfoliosSaltus Investment Managers
Best Asset Manager – Income PortfoliosAberdeen Asset Management PLC
Best Asset Manager – Alternative InvestmentsGAM Alternative Investment Solutions
Best Multi-family Office Asset ManagerSmith & Williamson
Best Marketing CampaignBNP Paribas Wealth Management
Best Law Firm (Family)Boodle Hatfield
Best Law Firm (Defamation and Reputation)Harbottle & Lewis
Best Tax & Accountancy TeamDixon Wilson
Best Property AdviserBlack Brick Property Solutions
Best Trust ServicesRBC Wealth Management
Best Technology Provider Third Financial Software
Most Innovative ProductKYCme
Best Technology Provider – Transaction ProcessingSunGard
Best Global CustodianNorthern Trust
Best Private Client Legal TeamMourant Ozannes
Best Brand LaunchElian
Wealth Adviser Leadership AwardDaniel Pinto, Stanhope Capital
Best Wealth Management JurisdictionJersey
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 4
in good times and not lose money in bad times. Fund managers have also experienced a carpet bombing of criticism from politicians and others who have blamed them for all the ills of the economy, he said.
“Why are we so resilient?” he asked. “We are alive and kicking and thriving because at the end of the day we give a good service to clients which means most investment firms have grown. We have taken the blows silently and now it’s time to speak out that what we do is positive.”
And there is a lot to do. The rich are getting richer; they like buying property and they like collecting things. These were just some of the results in Knight Frank’s wealth survey published earlier this year. (Wealth Adviser: www.wealthadviser.co/2015/03/05/219496/investments-passion-beat-fixed-income-super-rich-aspirations)
Their survey of global wealth managers and private banks found that 2014 had proved to be a more profitable one for the world’s ultra-high net worth individuals than had been expected. In 2013, just 63 per cent of the survey’s respondents had
Speaking at the Wealth Adviser awards earlier this month in the glorious elegance of Sketch in Mayfair, Sunil Gopalan, Chairman of Wealth Adviser’s parent company, GFM Limited, said that chief concerns for the wealthy and their advisers were the low interest rate environment, the increasing cross border nature of regulation and the need for growth in investment technology. The wealthy need old fashioned merchant banking services, Gopalan said.
Key note speaker at the awards was Daniel Pinto, chief executive and founding partner of Stanhope Capital, who commented that wealth managers are survivors, surviving the tidal wave of regulation which has occurred since 2008 which had forced some of them back to school. “We have endured a compliance blitz which means that we spend more time with our compliance officers than clients,” he said.
He commented on the slight fall from grace of hedge funds which have faced more questions over their performance in recent years, but have left their challenging legacy of clients expecting to make money
The rise and rise of the wealth manager
By Beverly Chandler
OveRv i ew
The 2015 Wealth Adviser awards at Sketch were filmed. Here is montage of the event itself and the winners receiving their awards: https://vimeo.com/128371847
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 5
expected their clients’ wealth to increase but a year later, 82 per cent said it had actually increased during 2014.
Things may have been looking rosy in the ultra-high net worth individual’s garden over 2014 but even the super-rich share concerns with those with smaller fortunes. The Knight Frank report found that according to the wealth managers and bankers surveyed, family and business succession issues most concerned them – beating even worries of potential hikes in wealth taxes.
The wealth management survey from Ernst & Young in 2014 equally found that the wealthy are principally concerned with holistic goal planning and wealth transfer. “Holistic goal planning has a fairly limited impact on client acquisition and retention, yet it’s the most important trend influencing clients’ decisions to seek out wealth management firms” the report said. “This suggests that clients see little differentiation across firms’ planning approaches and are not fully aware of the benefits of their current firm’s planning offering. Capitalising on the client desire for goal planning requires not just a differentiated offering that attracts clients but one that communicates the value proposition to clients.”
And in the UK, goal planning and wealth transfer became even more important in 2015 when post 6 April, one of the biggest changes in pension regulation came into force. Whatever the wealth of the individual, April’s new pension freedoms spelt out a wealth of opportunity and potential new business for sophisticated investment advisers.
Don’t buy the LamborghiniIt was Chancellor George Osborne’s changes in the 2014 Budget that meant that clients aged over 55 – who represent an age group that is often the most affluent in the UK – would no longer be forced to buy an annuity, designed to provide rest of life income, and would now be able to dip into their pension pots, taking as many withdrawals as they wished, each time getting 25 per cent tax free with the balance taxed as income.
The Chancellor also got rid of the 55 per cent 'death tax' on pension pots left invested, a change that again chimed with client concerns about the succession of wealth through the family.
Building up to the pension freedom date, there were estimates that these changes could result in some GBP6 billion in cash being pulled out of previously locked-up pension pots in the first four months of the new regime.
A Channel 4 Dispatches programme found that almost half of the over 55s, roughly two million people, were planning to take some or all of their money out of their pensions after the April 6th deadline and identified a rising worry that it would all be spent by the following April.
Roadshows were planned, training was conducted, new products were created but in fact, not so many newly liberated young pensioners did buy the Lamborghini.
April 2015 research from PwC (Wealth Adviser: www.wealthadviser.co/2015/04/09/221238/new-research-finds- 11
OveRv i ew
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 6
lOndOn & Cap ital asset management
London & Capital Asset Management
Best ultra High net worth team
1986 saw the foundation of London & Capital, established by its two founding partners and created to provide a framework for wealthy families that were time poor, drawn from the entrepreneurial, newer makers of money.
Iain Tait, Partner and Head of the Private Investment Office at London & Capital explains that these families were already well banked and well advised from a tax and accountancy perspective but needed a framework for their liquid wealth that wasn’t going back into the family business or needed for other objectives.
The original partners quickly began to offer an international service, focusing on the UK, US and across Europe and London & Capital has now grown to a business that looks after USD4 billion for first or second generation wealth generators drawn from several hundred families.
Tait joined London & Capital ten years ago and the evolution to offering the Private Investment Office service grew out of the firm’s realisation that there was a new level of service required for families that are London or UK-based, often resident non-domiciled, with larger assets, who needed a more bespoke and detailed service.
Tait calls this group ‘the forgotten rich’ with family assets of between GBP10 million to GBP200 million, putting them above standard wealth management and yet below family offices. “We felt that it was a level of family wealth that was not being particularly well looked after,” Tait says. “We realised there was a gap in the market which was not well serviced by our competitors.”
London & Capital’s Private Investment Office clients get pure investment support, without necessarily the full concierge services. They look after some 70 families and the largest ten have a dedicated investment committee and board with London & Capital representatives, regular minuted meetings, external advisors, consolidated reporting and full visibility on the level of risk within a portfolio.
“We think that the market has forgotten about this particular segment – there is a focus on the super wealthy within family offices and the mass affluent that are looked after very well,” Tait says.
His clients tend to be newer wealth and people in their 50s and 60s who are thinking about their legacy and are more comfortable of letting go. “We try and find this moment where they are happy to let outside expertise into their world,” Tait says.
The other area that has proved successful for them is looking after their fellow money managers who have made money in the investment space. “We are proud to be the investment manager of choice for those in the investment management business,” says Tait.
He notes that clients are getting younger and the transfer of wealth within a family is happening at a younger age. “You need to
cater for the next generation who are interested in how their wealth is managed – the whole approach is more hands on, up to date and the clients are comfortable with technology and don’t tend to switch off so much,” he says.
“We need to be fleet of foot and nimble. We are constantly upgrading our reporting and cyber security.” n
Iain Tait, Partner and Head of the Private Investment Office at London & Capital
Jessica Crane receives the award from Beverly Chandler
We’re delighted to have won the award for Best Multi-Family Office Asset Manager
Bespoke excellence as standard –A Private Client service built around your needs. We have been helping to manage the financial affairs of private clients, together with their family and business interests, for more than a century.
Uniquely placed in the industry, Smith & Williamson combines a firm of chartered accountants, an investment management house, a financial advisory practice and a private bank.
There is a dedicated team in the London office that is dealing with a comprehensive range of private client services. Drawing on the expertise of our financial planning, investment, tax and accounting specialists, we offer a bespoke financial advice service tailored to meet your needs.
We put an emphasis on developing a relationship of trust and integrity, and our clients have direct access to the team of dedicated professionals from each service area ensuring specialist advice on a wide range of financial issues.
Please remember the value of investments can go down as well as up and you may not receive back the original amount invested. Past performance is not a guide to future performance.
If you would like to find out more, please contact:
Nick Richards Partner 020 7131 4095 [email protected]
Smith & Williamson LLP Regulated by the Institute of Chartered Accounts in England and Wales for a range of investment business activities. A member of Nexia International. Smith & Williamson Investment Management LLP and Smith & Williamson Financial Services Limited are authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate all of the services referred to here. The word partner is used to refer to members of Smith & Williamson Investment Management LLP. © Smith & Williamson Holdings Limited 2015.
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 8
smitH & will iamsOn
Smith & WilliamsonBest multi-Family Office
Independently-owned investment management, tax and accountancy group, Smith & Williamson, was established by its eponymous pair of tax accountants in Glasgow some 130 years ago. While the firm moved south to London shortly after, it enjoys a substantial presence in Glasgow even today.
Smith & Williamson Partner, Frank Akers-Douglas, explains: “We have concentrated on private clients and tax and wealth management throughout the history of the firm. Many members of the original family, which led to the establishment of the investment department a century ago, are still clients of the firm six generations later.”
Akers-Douglas feels that it is that continuity in providing a holistic financial service in such a specific sector of the market that has allowed the firm to grow substantially. “Our services to family office clients have been the genesis of the Smith & Williamson business. We have concentrated on presenting this suite of services to clients of that nature to support them in their medium and long term financial strategy,” he says.
Partner Charles Gowlland says: “One of the things which remains key is that we provide a service rather than a product. And if we do launch new things, it’s because the demand is there, not the other way around.”
Gowlland also believes that the historic shape of the firm, which is majority owned by present and past Partners, Directors and staff adds to its strength. “Our partnership structure differentiates us from other firms and makes us masters of our own destiny. That ability enables us to focus on how best to serve our clients over the long term.”
In his experience, many family offices suffer from being sold products. “Instead, clients want trustworthy people who will be around to serve them and their descendants,” Gowlland says. “Because we have the continuity of Partners and staff we also have continuity of clients.”
In terms of trends, Akers-Douglas has
identified a significant change which has occurred over 2014 and into 2015 in terms of tax advice. “There have been changes to giving tax advice,” he says. “Formerly my role was to ensure my clients avoided the bear-traps of an increasingly complex tax system and paid the correct amount of tax, but matters are now more complicated. The clear distinction between tax evasion and avoidance has been blurred and as a result, people are understandably increasingly cautious in their approach.”
Akers-Douglas finds this a major shift which has affected clients’ attitudes and the way they look to manage their affairs.
For Gowlland, a big change has been the huge overhaul in regulation which has affected the sector and which continues to have its impact. “Brussels is planning further legislation,” he says. “So again the compliance costs for a lot of businesses are ratcheting ever higher.”
In investment terms, many Smith & Williamson clients are looking for yield. “The chase for yield will continue” Gowlland says. “We still think there are opportunities in some areas, for example structured credit, otherwise the main option is equities. Investing in these assets classes will bring additional risks to capital values, so clear communication is more important than ever, so as to calibrate the client’s risk/return appropriately. We aim to have long term relationships so there is no point in promising something that can’t be delivered.” n
Frank Akers-Douglas, partner, Smith & Williamson
Charles Gowlland, partner, Smith & Williamson
DisclaimerBy necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing. The tax treatment depends on the individual circumstances of each client and may be subject to change in future.
Risk warningInvestment does involve risk. The value of investments and the income from them can go down as well as up. The investor may not receive back in total the original amount invested. Past performance is not a guide to future performance. Rates of tax are those prevailing at the time and are subject to change without notice. Clients should always seek appropriate advice from their financial adviser before committing funds for investment. When investments are made in overseas securities, movements in exchange rates may have an effect on the value of that investment. The effect may be favourable or unfavourable.
Smith & Williamson LLPRegulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. The word partner is used to refer to a member of Smith & Williamson LLP or Smith & Williamson Investment Management LLP.
INVESTING IN RELATIONSHIPS GETS THE BEST OUTCOME
Investors should remember that the value of investments, and the income from them, can go down as well as up. Quilter Cheviot Limited is registered in England with number 01923571. Quilter Cheviot Limited is a member of the London Stock Exchange and authorised and regulated by the UK Financial Conduct Authority.
SEE HOW WE’RE DOINGTHINGS DIFFERENTLY
TEL. 020 7150 4005 OR VISITWWW.QUILTERCHEVIOT.COM
OS004804_QC_Ad_297x210[1].indd 1 20/05/2015 09:51
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 10
Quilter Cheviot Investment Management
Best Boutique wealth manager
with the intermediary,” Loudon says.Quilter Cheviot has over 160 investment
managers. Loudon says: “We have a firm wide investment process, providing a disciplined framework throughout the firm. Therefore, investment managers across all our offices work with a standard investment process. Whether it’s Manchester, London or Jersey, consistency is very important from the point of view of the client, the introducer and also the regulator who is looking for a robust process.”
The average client size is over GBP500,000, ranging from a direct portfolio to their SIPP, a charitable or family trust, ISAs and so on.” SIPP and Charity assets are increasingly important to the firm and in many cases trustees might be direct clients as well.
“As a specialist investment house, we have maintained that our investment managers have the dual role of managing money and also meeting clients and talking on a regular basis,” Loudon says.
“Some firms manage the money from an ivory tower but we have found that clients like their investment manager to be sitting in front of them and explaining their portfolio.”
This year has seen Quilter Cheviot moving into the Old Mutual Group as a standalone part of Old Mutual Wealth, offering services to the high net worth client and picking up increasing amounts of business as more and more financial advisers appoint discretionary fund managers.
“It is important to remember we are nothing without our clients,” Loudon says. “It is up to us to add value and an increasing number of independent financial advisers are looking at outsourcing discretionary fund management. We also need to recognise the changes in society and the way clients wish to do business and it’s important that we respond.” n
Click here for the video interview with David Loudon: https://vimeo.com/128371848
David Loudon, director and head of regional offices for Quilter Cheviot Investment Management, believes that the most important element in the business is maintaining the high personal standards of service for direct clients and intermediary introducers around the country.
Along with many in their sector, the firm has experienced a number of corporate changes over the years, the most recent two seeing the 2012 merger of Quilter and Cheviot and the 2015 purchase as a specialist branded unit within Old Mutual Wealth.
Individually, Quilter was originally Quilter Goodison, a stockbroking firm led by Sir Nicholas Goodison who was chairman of the London Stock Exchange right up to the Big Bang deregulation of the London financial markets. Cheviot Asset Management was launched in May 2006, following the recruitment of 92 investment professionals and support staff from UBS.
The united firm has GBP17.5 billion (as at 31 March 2015) of funds under management and the largest source of new business is via the financial adviser route, where Quilter Cheviot is part of a selected panel of investment firms. “In many cases we will win the business and it is important to add value to underlying client portfolios and also form a lasting relationship
David Loudon, director and head of regional offices for Quilter Cheviot Investment Management
Qu ilteR CHev iOt investment management
David Loudon collects the award from Beverly Chandler
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 11
OveRv i ew
15
fewer-spendthrift-pensioners-feared) found that just 1 per cent of 50-75 year olds said they would use the entirety of their pot to treat themselves, while just over a quarter (27 per cent) of those surveyed intended to spend some of their money on general expenditure, treating themselves or on home improvements, unsecured debt and mortgages.
The report found that those approaching retirement were well aware of the need for their money to be used to fund an income, with 67 per cent of respondents factoring certainty of income into their retirement decisions. Annuities, however, were not the preferred option for those looking to do so, with only 28 per cent of respondents planning to purchase one.
Commenting on the pension changes, Andrew Humphries, marketing director, St James’s Place, winner of Best Private Client Investment Manager in the Wealth Adviser awards, says: “First of all there is no doubt that we are living in the age of responsibility. The recent pension changes are another perfect example that people have to take greater responsibility for their own financial wellbeing.”
And while it is true that changes in pension legislation don’t have quite the same effect on the portfolios of the truly wealthy, everyone has to be individually responsible in the new world.
Humphries says: “While guidance is a good starting point, people want to be
5
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 12
Black Brick Property Solutions
Best property adviserCamilla Dell, chief executive officer, founded her property buying agency Black Brick back in 2007. “I wanted to create a firm that was completely independent” she explains, “not owned by an estate agent or a private bank. It’s one of our key strengths and unique selling points.”
High levels of service and professionalism were also important to her. “My industry suffers from small one or two man bands with people sort of playing at it – that’s not what I set out to do – I wanted to take things to the next level and we set the bar higher and higher every year” Dell says.
In financial terms, since 2007, Black Brick has successfully secured in excess of GBP0.6 billion in residential property for its clients. Originally all the business came from an international client base but now the mix of clients is more balanced with 60 per cent of them coming from overseas (from 35 countries) and 40 per cent from the UK.
“It’s changed to that degree” Dell says, “and shows our services are needed just as much for people who live and work in London and are struggling to find the property they want.”
“There is no typical client” Dell says. “They range from the lower end, who are seeking to buy a house for half a million all the way up
to GBP50 million and everything in between. One of the nice things about Black Brick is that we are not pigeonholed – we cover huge areas of London from Hackney in the East to the North London suburbs, down to Battersea and Clapham and out to the West. It’s not just high end central London.”
The firm became market leaders in educating private banks that they need to use a buying agent. “If the private bank finds out that their clients want to buy a property, they can see value in using a buying agent” Dell says.
Black Brick is on the panel of a number of private banks who recommend their services to their clients. “Our principal role is to ensure our client gets the possible deal they can” Dell says. The firm does not directly sell but offers a managed sale service to help facilitate the sale of a property, often educating foreign investors on how the system works in the UK.
Black Brick also offers a complimentary concierge service, helping buyers move in to their new property, hooking up utilities, internet and advising on removals.
In a conscious decision to evolve, the firm also now offers other key services such as a vacant care service for houses left empty for a period of time and a housekeeping service to reopen them again when they are needed.
Post completion for houses that have been bought to let, Black Brick can also manage a house acting as a managing agent.
Due to the fast-growing Chinese client base, Grace Ding joined Black Brick in December 2014 to focus on this and developing the business network across Asia. Grace speaks fluent Mandarin and holds an advanced diploma in translating and interpreting, making her the perfect point of contact for all the firm’s Chinese-speaking clients. Dell says: “With Grace’s arrival, we are now better placed than ever to fulfil the UK property ambitions of our Chinese clients.” n
Camilla Dell, founder and CEO of Black Brick
BlaCk BR iCk pROpeRty sOlut iOns
Casper Harvard-Walls collects the award from
Beverly Chandler
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
St. James’s Place is delighted to receive the 2015 Best Private Client Investment Manager Award
from readers of Wealth AdviserOur relationship-based advice service means that we are committed to helping our clients
manage their wealth in a way which reflects their personal circumstances.
The advice we provide to individuals, trustees and businesses ranges from investment planning through to tax planning, helping our clients grow and protect their wealth.
If you would like to find out more about our award-winning service simply request a copy of our complimentary ‘Guide to Wealth Management’ please contact us.
0800 0138 137 • www.sjp.co.uk
Putting clients at the centre of everything we do is core to our culture
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.Members of the St. James’s Place Partnership represent St. James’s Place Wealth Management plc, which is authorised and regulated by the Financial Conduct Authority.
St. James’s Place Wealth Management plc, St. James’s Place UK plc, St. James’s Place Unit Trust Group Ltd and St. James’s Place International plc are members of the St. James’s Place Wealth Management Group. St. James’s Place UK plc is authorised by the Prudential Regulation Authority and regulated
by the Financial Conduct Authority and the Prudential Regulation Authority. St. James’s Place Unit Trust Group Ltd is authorised and regulated by the Financial Conduct Authority. St. James’s Place International plc is authorised and regulated by the Central Bank of Ireland. St. James’s Place Wealth Management plc
Registered Office: St. James’s Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom. Registered in England Number 4113955.
AWARD WINNER 2015
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 14
St. James’s Place Wealth Management
Best private Client investment manager
Andrew Humphries, marketing director, St. James’s Place Wealth Management
no in-house team of investment managers, believing that no single investment house can have a monopoly of investment expertise. Instead, it selects a number of leading external managers to manage its broad range of funds. These choice of managers is made by the St. James’s Place Investment Committee, advised by a number of independent investment consultants including Stamford Associates and Redington.
A combination of high quality face-to-face advice and best in field fund managers has resulted in the firm having over GBP55 billion of funds under management.
In addition to the Investment Committee, there are other specialists who select in specialist areas such as the venture capital or EIS sectors, along with those specialising in life assurance, protection and mortgages. “There is a combination of products we manufacture ourselves such as ISAs, pensions and bonds,” Humphries says. “Plus other products and services where we will perform due diligence to identify who we think are the best in those markets.”
“The key point is to ensure our Partners can focus on what they do best – giving bespoke face-to-face advice without having to spend significant time worrying about the quality of the underlying providers,” notes Humphries.
While remaining focused on the UK, the company sees opportunities to expand their services to the expatriate community. “Building upon the successful integration of our newly acquired team in Hong Kong, Shanghai and Singapore, we are also in discussions with the relevant authorities in the Middle East. We hope, to progress the provision of financial advice to the UK expatriate community there in the near future,” says Humphries. n
Business models within the wealth adviser space vary but the structure of the FTSE 100 listed St. James’s Place Wealth Management structure remains truly distinctive.
Andrew Humphries, marketing director, explains: “The fundamental business model has remained the same since 1991 aiming to provide the highest quality face-to-face personal financial advice we can through the St. James’s Place Partnership, the in-house advisory channel of St. James’s Place.”
The 2,132 St. James’s Place Partners (the marketing term used to describe St. James’s Place representatives) are self-employed wealth managers running their own businesses closely linked to St. James’s Place in a vertically integrated business model. St. James’s Place Wealth Management effectively acts as a central hub, provides the products and service, while the Partners provide the financial advice.
“The reason we only distribute through the Partnership is that we believe in face- to- face advice,” Humphries explains. “And the best route to that is by ensuring high quality advisers, so we have very strict criteria in terms of who is eligible to join St. James’s Place. We recruit from existing high quality advisers and increasingly train and develop our own.”
The company runs a successful Academy programme, “Over the last two or three years we have recognised that there is a dearth of new blood coming into the industry so we have established our own academies in London, Manchester and the Midlands. We take second careerists who want a career change, show a keen interest in our face-to-face advice based approach and wish to gain the opportunity to build their own business,” Humphries says.
St. James’s Place has a distinctive approach to investment management. It has
st. James ’s plaCe wealtH management
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 15
advised on what they should be doing – the changes re-emphasise the need for good quality advice in the UK.” The St. James’s Place annual survey of their clients asked what their key concerns are and number one at 75 per cent was ensuring they had enough to live on in retirement.
“In a low yield low interest rate environment that search for income has been with us for four to five years and investors expected interest rates to turn around from 2009 lows, but the fact they haven’t has emphasised to people that they can’t expect rates to rise significantly anytime soon” Humphries says.
With rates the way they are, Humphries feels that investors cannot expect a greater than 4 per cent income from a well-diversified portfolio.
Humphries believes that the pension changes have brought the issue forward in many investors’ minds.
“It is dominating peoples’ thoughts and highlighted by the change in pension legislation that investors want to manage their own retirement funds and not just buy an annuity,” he says. “There is no panacea that combines the best bits of annuities and with-profits, people need a well-diversified portfolio across a range of different asset classes.”
Matt Philips of Thomas Miller Wealth Management, interviewed in Wealth Adviser in March (www.wealthadviser.co/2015/03/27/220561/duty-care-means-clients-are-advised-not-buy-lamborghini-quite-yet), says: “For the wealthy, pension reform does not have the same impact in that they
might not have the same need for income in retirement.”
In these cases, Philips believes that the pension can become an inheritance tax vehicle, allowing a tax efficient handing down of a pot of money to the next generation.
Best Multi-Family Office winner Smith & Williamson’s tax partner Frank Akers-Douglas says: “The pension changes caused a huge amount of lead activity up to 6th April. However the ability to withdraw from a pension arrangement is less attractive in the context of our client base who are likely to have assets in their own hands anyway. The fact that you hand on your pension now is very useful and for people with fewer assets and smaller pension pots it is an attractive option.”
Principles of good governance for family wealthSmith & Williamson recently conducted a survey of high net worth individuals, seeking to establish what makes good governance of the family wealth. Their central theme was the need to manage family dynamics, both in the relationships within the family and in dealings with professional advisers.
They found that those surveyed felt that good communication, trust and the ability to take the long view were crucial to the protection and enhancement of wealth. David Cobb, Head of Investment Management & Banking at Smith & Williamson says: “Looking after the family’s financial affairs was widely viewed as a responsibility that cannot be dispensed with until the next generation has been fully prepared to take
11
OveRv i ew
18
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 16
tH iRd F inanC ial sOFtwaRe
Third Financial SoftwareBest technology provider
Third Financial Software is a family owned company, founded in 2008 father and son team, Roger Foster, non-executive chairman and chief executive Stewart Foster. Foster Senior started in the IT industry in 1965 so brought a wealth of experience to the new business, while Foster Junior had 14 years of experience of financial services.
They founded in the midst of the global financial crisis, which, at the time, seemed a challenge but with the benefit of hindsight, chief executive Foster feels enabled them to catch the wave of regulatory change in the wealth management industry which for Third Financial Software brings opportunities.
“We wanted to own a privately owned company in this marketplace and felt the investment management market was not well served at the time,” Foster says. “What we have is a modern system, built in the last half a dozen years, that has all the mandatory regulatory and compliance changes you need in a single data source.”
They spent some GBP6 million developing the product. Whereas traditional wealth management systems were traditionally investment management based, the Third
Financial Tercero Software Platform system is front to back. “It has everything you need so a smaller investment or wealth manager in the UK can run our system with nothing else needed, the strength is the integration,” Foster says.
Tercero’s clients range from having assets under management of GBP100 million to GBP10 billion, encompassing the smaller mid-range of wealth managers in the UK.
The firm is UK and Channel Island centric and estimates that there are about 400 to 500 firms in its sights, of which 50 already are their clients. “We have sold more wealth systems than anyone else in the last few years,” Foster says.
“We want to stay in our market place and leverage from that position so we are setting up a new company to supply UK clients who outsource their back office,” Foster explains. The new third party administration platform will be headed by Matt Aylward, ex-Brooks Macdonald, who brings pedigree from the investment management side of the marketplace. “We are focusing on being number one in our chosen marketplace,” Foster says.
Trends that Foster has observed developing over the last few years in the wealth management industry are the rise of the direct to consumer approach, such as MoneyFarm or Nutmeg. “The market is changing and I am a big fan of it,” Foster says. “We will be making further investment in some of our digital capability to be able to support the direct to client service.”
Looking forward, Foster believes that the market will split into two. “We think the whole market will change as money moves with people going from pension companies to the investment management community with direct to client services and then going to traditional companies for advice,” Foster says. “It’s an opportunity for my clients and quite exciting.” n
Stewart Foster, CEO, Third Financial Software
Andy Milne collects the award from Beverly Chandler
Wealth adviser aWards Special Report May 2014 www.wealthadviser.co | 17
KYCme.commost innovative product
a client has provided originals which have been certified, encrypted and stored.”
In developed countries, this is a useful tool but Kotedia explains that in emerging economies such as Asia and Africa, this becomes even more useful.
“In these countries, you ask, how do you identify people? So we built our portal not to restrict on the type of identification proof that you would put on it. It could be a birth certificate or a driving licence to make it a global proposition.”
In terms of allowing people on the corporate side onto the platform, KYCme vets people and then allows them to join which creates a trust network among professionals. The exchange process enables secure certification and transmission of documents to vetted and approved members (“certified intermediaries”) of KYCme using their trusted network. Members will include banks, laws firms, accountants, government bodies and any institutions affected by the ID verification and authentication process.
Launched two years ago, the platform has about 100 plus individual users who pay an annual fee of £20 to £100 a year with banks and financial institutions taking up multiple channels. “We want to be the gold standard of identification,” Kotedia explains. “When you look at who needs this information, the trust network becomes very powerful.”
Kotedia personally meets with each institution on the platform providing third party potential proof on the corporate side. Kotedia said that KYCme is looking to work with the UK government’s Cabinet office on its virtual ID programme and Open Identity Exchange of which it is a member.
“KYCme plays a significant role in the fight against money laundering and terrorist financing,” says Kotedia. “KYCme will continue to evolve and develop to remain one step ahead of AML and KYC legislation.” He also mentioned that he is excited to receive various collaboration opportunities, which can only be good for business and a better way to do business. n
The problems of securing primary ‘know your client’ information were the driving force behind Mehul Kotedia’s launch of KYCme.com in 2009. Kotedia, a Channel Islands based accountant and tax adviser had observed the laborious process of gathering a potential client’s primary ‘know your client’ information to fulfil due diligence requirements for anti-money laundering and other regulations.
“It’s a laborious exercise,” he says as clients have to provide passports, utility bills and other documentation. “We said there must be a simple way to do that where people can secure their information on line on a platform, and we created the KYCme platform where you can store all your information and share it securely with people.”
For private clients there are other benefits to signing up, including if they lose their passport on holiday, they can simply login to their account and retrieve the scanned and authenticated copy. Any lost documents around significant investments or purchases such as taking out a mortgage can be stored in the virtual vault and access can be given to authorised intermediaries to complete the KYC authentication process, saving valuable time.
Beyond that, the platform allows a client to ensure that the information belongs to the client only. “We have certified intermediaries, certified people such as lawyers, accountants or advocates who are our members who can be certain that
Mehul Kotedia, founder, KYCme
kyCme.COm
Mehul Kotedia collects the award from Beverly Chandler
Wealth adviser aWards Special Report May 2015 www.wealthadviser.co | 18
Overv i ew
up the reins – a process that often takes many years. Some of our respondents were in their seventies and were still managing the family finances while their children completed their university education or established their careers.”
While the exact moment when the next younger generation might take up the mantel of looking after the cash was not clear, most thought it would be earlier than was accorded to the last generation, but still probably not until they were in their thirties.
The survey found that members of the younger generation typically want to build relationships with advisers who are close to them in age and outlook, and who are prepared to entertain fresh ideas. Cobb writes that several interviewees warned that professional services firms risk losing their clients if they fail to bring in younger assistants or partners to keep step with evolving family needs.
Those surveyed for the Smith & Williamson report recognised that sustaining their wealth is something that requires their focus, their time and a good deal of management.
Cobb writes: “Not all wanted formal family meetings, but for some they were a necessity. What everybody did want was a set of professionals they could rely on and whom they got on with or even liked. There was no clear preference for one professional service over another; however, getting ‘the right people on the bus and in the right seats’ was seen as a prerequisite for success and making life as easy as possible.”
Along with the findings from the Knight
Frank report, those surveyed by Smith & Williamson were aware of threats to their wealth, but saw no reason to change course provided they had surrounded themselves with a team in which they had complete confidence.
The importance of professional advisers and the rise of the digital ageHaving the right professional advisers in place is crucial for the Smith & Williamson respondents. The overwhelming majority prefers to deal with a small team and values long-term relationships built on trust and personal chemistry.
Frank Akers-Douglas quotes a representative view as: “Financial services come down to personal relationships – do you trust them, are you pleased to see them, do you like them, are they doing a good job and are they charging a reasonable amount for those services?”
Iain Tait, partner and head of the Private Investment Office at London & Capital who won the Best Ultra High Net Worth team award with Wealth Adviser comments in his profile on the impact of the digital age on their business. Their clients, he says, increasingly don’t switch off for large chunks of the year but want a constant access to information. The challenge for him is providing a constant reporting stream but maintaining cyber security.
Stewart Foster, chief executive of Third Financial, winner of Best Technology Provider, agrees that clients want more digital facilities. Foster says: “It’s an opportunity for my clients and quite exciting.” n
15
