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Cover Star Club: the wealth managers we grilled in 2016 - part 1

In the first of a two part series, we run through the wealth managers we profiled in the first half of 2016.  

Who: Anton Sternberg, UK investment head 

Where: Stonehage and Fleming & Family Partners

When: 7 Jan 2016

Why: In something of a theme this year as regulatory pressure shifted the wealth industry’s optimal capital structure, Sternberg talked us through the mechanics behind the merger of the two groups, which created a business with almost £30 billion in client funds.

What we learned: Handholding is important in M&A. ‘We invested a lot of time and energy to help ensure our employees understood what was happening and why we were doing it.’

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Who: Anton Sternberg, UK investment head 

Where: Stonehage and Fleming & Family Partners

When: 7 Jan 2016

Why: In something of a theme this year as regulatory pressure shifted the wealth industry’s optimal capital structure, Sternberg talked us through the mechanics behind the merger of the two groups, which created a business with almost £30 billion in client funds.

What we learned: Handholding is important in M&A. ‘We invested a lot of time and energy to help ensure our employees understood what was happening and why we were doing it.’

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Who: Andrew Stevens, CEO

Where: Fulcrum Asset Management

When: 14 Jan 2016

Why: Platform distribution, the right gatekeepers and appetite for non-directional alpha had doubled assets over the preceding three years. Stevens explained how the group is mining further down the distribution chain.

What we learned: Having the right people in the right places is critical. ‘We have a big presence in defined benefits and a growing presence in defined contributions. Ultimately we hope to take that as far down [the distribution chain] as advised retail.’

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Who: Rob Jeffree, CIO

Where: C Hoare & Co

When: 21 Jan 2016

Why: The UK’s oldest bank was at the time overhauling its wealth management division for the 21st century, ahead of the subsequent sale of the fund selection team to Cazenove in October 

What we learned: Even an institution dating back to 1672 can no longer rely on old money. ‘The mix of clients is changing. New clients are often more complex, such as entrepreneurs and international clients.’

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Who: Rory McPherson, head of investment strategy

Where: Psigma

When: 28 Jan 2016

Why: McPherson went from £168 billion tanker to £2.4 billion tugboat when he left Russell Investments to join Psigma, but was drawn to work alongside old friend Tom Becket in a slightly more entrepreneurial environment.

What we learned: He appears to have some masochistic tendencies. ‘[The January crash] has been a good way to start. The best way to get involved is to throw yourself in at the deep end.’

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Who: Marco Sambucci, head of planning

Where: Mosaic Money Management

When: 04 Feb 2016

Why: Sambucci was hired to launch a ‘concierge’ planning service at the Chester-based discretionary manager and says that an integrated business model is becoming essential to manage professional liabilities.

What we learned: One of his first clients was a recipient of compensation from the Piper Alpha oil platform disaster. ‘Over the ensuing few years, I had to advise people who received compensation in very delicate circumstances. You were advised what subjects not to talk about. It was then that the enormity of how financial planning fits into people’s lives struck me.’

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Who: Mike Roberts, UK MD

Where: PortfolioMetrix UK

When: 11 Feb 2016

Why: The discretionary outsourcing service has differentiated to distinguish itself in a crowded market and won adviser plaudits for its strategy of bundling a range of normally stand-alone tools.

What we learned: He believes current outsourcing rules are a brewing mis-selling scandal. ‘The COB [conduct of business] rules, as written, describe advisers as professional clients. If something goes wrong [with an investment portfolio] then that means the [end] client has no recourse to the ombudsman [or] compensation. It’s a complete regulation fail.’

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Who: Stephen Felle, head of regions

Where: Davy Private Clients

When: 18 Feb 2016

Why: The Irish are coming. Having opened in Belfast a decade ago, the island of Ireland’s leading broker/manager is intent on bringing its business to mainland Britain. We got the inside view of its expansion and acquisition strategy.

What we learned: The business is already future-proofed against Brexit. ‘If we hadn’t gone to Belfast and had to put really expensive infrastructure in place to make the business UK-compliant, we might not even be looking at London. But having invested in that infrastructure enables us to support a whole load more assets.’

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Who: Quentin Marshall, head of private banking

Where: Weatherbys

When: 25 Feb 2016

Why: Marshall is adding a second tier of specialisation at the house-bank of the horseracing industry, in addition to the passive investment service it went on to launch this September.  

What we learned: A lot of the interview felt like semi-veiled criticism of a previous employer. ‘Too many in the industry act more like manufacturers and salesmen – they make products and sell them and that is that. I have not done the latter as that isn’t what it’s about.’

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Who: Sally Collins, head of service

Where: Simply EQ

When: 3 Mar 2016

Why: The head of John Spiers’ low-cost digital service is aiming for cyborg rather than full-robo, with automation combined flesh and blood oversight, providing a gateway drug for accumulative clients not yet ready for the full EQ Investors experience. 

What we learned: Don’t call it robo. ‘The term robo-advice conjures up an image of robots or the Terminator, but in reality, we are trying to fill the advice gap. Robo means purely online to me, and we are providing regulated advice to people mainly online, but also over the phone or face-to-face.’

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Who: Samy Chaar, global chief economist

Where: Lombard Odier

When: 10 Mar 2016

Why: ‘Predicting is a lost cause’ Lombard Odier’s investment strategist and economics boss presciently told us in March, supplying what turned out to be an appropriate epitaph for 2016. ‘Correlations break… great relationships do not usually last forever.’   

What we learned: A lot now feels eerily prophetic. ‘Looking at 2016, is this volatility transitory and something we have already seen in the past few years, or is it the big one? Will we see this volatility carry on for months? To get the latter you need some kind of economic accident, you need to have a rupture of sorts.’

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Who: Peter Hearn, director

Where: European Wealth

When: 17 Mar 2016

Why: After building assets to £1.2 billion in just six years Hearn says he hopes to repeat that level of fund growth – while avoiding some of the mistakes he saw at his previous employer, Ashcourt Rowan.

What we learned: He doesn’t relish management.While at Ashcourt I became a director, but I didn’t actually like it… there is a danger of getting too big, but it is about making sure the people that come into the business are of the nature and culture that will be able to work in a short chain of command.’

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Who: Bob Woods, chair & co-founder

Where: Mattioli Woods

When: 24 Mar 2016

Why: Mattioli Woods has become a source of Hargreaves-eque fascination for our readers in recent years as, like its platform rival, they saw a relative outsider who appeared to have caught lightning in a bottle. Co-founder Woods explained why Hargreaves is a poor comparison, and the company’s very unglamorous beginnings in a repurposed garage.

What we learned: Why Woods doesn’t think he will ever be as rich as Peter Hargreaves or Stephen Lansdown: ‘Asset managers approach [margins of] 40%, and as they get bigger that percentage growth goes straight on the bottom line. As we start to benefit from that super-profitability, we are starting to consider how and where we share that.’

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Who: Stefano Del Federico and Tim O’Connor, co-founders and principals

Where: The Private Investment Office

When: 1 Apr 2016

Why: Launched as recently as January last year, the co-founders targeted a client segment they believed was underserved by wealth managers: entrepreneurs. We got in to find what makes its founders tick and how they plan to grow their new business.

What we learned: While the business is new, its founders are no neophytes: ‘We’ve been management committee members for big banks, we’ve been heads of divisions and we had all of the responsibilities in teams, business channels and governance. The last 20 years have been our apprenticeship.’

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Who: Andrew Shepherd, deputy CEO

Where: Brooks Macdonald

When: 8 Apr 2016

Why:  Brooks spoke to us ahead of its relaunch as a focused investment manager, merging its historically siloed fund and wealth management bits. Deputy chief Andrew Shepherd explained why, and what comes next.

What we learned: He is sceptical about some of the more vogueish management schemes aiming to replicate Old Mutual or St James’s Place: ‘I’m not saying that the vertically integrated [model] won’t work. But we will never go down that route.’

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Who: Jamie Broderick, head of UK WM

Where: UBS

When: 14 Apr 2016

Why: Although a fairly well known global bank, UBS's wealth management operations in the UK still have room to grow, according to Broderick. Getting in before the launch of its robo-advice service we found out about further plans to grow as the chief executive revealed that the company is hoping to extend its reach to the south west.

What we learned: Your perception of UBS’ relative decline is about your faulty understanding, not its historical errors. ‘I think we are a very capable wealth manager and our natural penetration of the UK is a multiple of where we are today. I don’t need a new initiative, acquisition or anything else. What I need is for us to communicate what UBS is capable of to the UK audience.’

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Who: Richard Dunbabin, CEO & Ian Balchin, CFO

Where: Ascot Lloyd

When: 21 April 2016

Why: Perhaps counter-intuitively for a business founded in 2000, Balchin says the company is only now approaching the exciting bit of the growth curve, as a series of incremental acquisitions begin to add up to a unignorable size, with £2 billion in assets.

What we learned:  He appears to be right: ‘The last two [purchases] gave us scale… the intention is there will be more acquisitions. We are in the process of evaluating some possible deals. We are in a stronger place than we have ever been before.’

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Who: Paul Feeney, CEO

Where: Old Mutual Wealth

When: 29 Apr 2016

Why: Really? OK, for those among you who dwell beneath rocks, Old Mutual is prepping a mega-demerger of its wealth division, likely to head straight into the FTSE 100 once spun out

What we learned: That the man in charge of this has a surprisingly gentle heart, writing and personally delivering a poem to inspire his staff:  ‘Here’s to the change-makers… to the responsible ones, whose value makes them wealthy, irrespective of the value of their wealth.’

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Who: Tim Childe, head of international

Where: Quilter Cheviot

When: 05 May 2016

Why: Recently promoted from head of offshore to head of global following Old Mutual’s takeover of the business the previous year, the boss of the company’s Jersey office explained where his division fits into OM’s plans for vertically-integrated world domination.

What we learned: 'We have always been based in Jersey,’ Childe said. '[And] we have always worked in multiple currencies across multiple jurisdictions, for beneficiaries and private clients all over the world. The core of our [professional] relationships will always be Jersey and Guernsey but we are increasingly looking to Africa, the Near and Far East  

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Who: Julius Manduell, director

Where: Hurley Partners

When: 12 May 2016

Why: After becoming disillusioned with his long career at Brown Shipley, Manduell downsized into a job in Hurley’s Manchester office. He explains why that has meant a welcome cultural change.  

What we learned: That as the owner of a 1,000-head sheep farm, he could be forgiven for following a herd mentality, LOL amirite? Seriously, he gave some interesting insight into the move:  ‘Brown Shipley was a great company to work for… that began to change around the time of the credit crunch, when the team at KBL began to change and the whole direction of the group also began to change.’

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Who: Tracey Reddings, MD UK wealth

Where: JPM PB

When: 19 May 2016

Why: As one of the most prominent women in wealth management, Reddings talked us through some of her personal projects helping to address a still-glaring gender imbalance in the industry.

What we learned: This being a private bank, the ratio of marketing-led talking points to tangible insight was heavily skewed. She did provide us with ‘Tracey’s top tips’ for success though

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Who: Charlotte Ransom, CEO

Where: Netwealth 

When: 02 Jun 2016

Why: The low-cost investment service had opened its doors the preceding month and the chief executive Ransom explained why she had left the relative prestige and security of being Goldman Sach’s head of wealth to try something new.

What we learned: How the firm had attracted the backing of City A-listers: ‘We were very targeted in who we went to in our angel investor raising. They are all friends and ex-colleagues in some cases. They are very excited about being part of making it happen.’

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