Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Profile: how five Towry alumni are breaking the mould

1 Comment
Profile: how five Towry alumni are breaking the mould

Lockhart Capital Management has grown faster than its founders imagined when it opened its doors in late August 2017. 

The boutique wealth manager, launched by five former Towry executives, now has some 80 clients and £200 million in assets under management.

‘When you’re setting up a business you have to be cautious that you’re not overly confident,’ says Jon Bowes, partner and CEO of Lockhart Capital Management (pictured right, above).

‘But considering we haven’t even been going for a year yet, our position today is a testament to the fact clients like what we are trying to do. We thought it would be there eventually, but clients have been flocking to us.’

The firm has offices in Aberdeen, Leeds and Cobham in Surrey and has doubled its head count since opening to ‘deal with the influx of new clients’.

Despite the rapid growth, however, the company insists it is not seeking growth for growth’s sake, stresses Bowes.

‘We wanted to create a simple to understand product, where our interests were aligned with that of the client, where we focused on client service rather than growth for growth’s sake,’ he explains.

‘We do not tell the client what to do. They tell us what they want and we make a plan that fits them. If that type of service suits them, and we acknowledge it’s not for everyone, then this can work really well.’

Andrew Wilson (pictured left, below), chief investment officer and one of the firm’s five founding partners, adds: ‘From a personal point view, if we have a maximum of 150 to 200 clients, it’s conceivable that I can talk to each and every one of them and I can provide bespoke pieces of investments for them.

‘Whereas in my previous life at Towry, with 15,000 clients there was no way I could provide this level of service or respond to individual emails. I would have to speak at seminars rather than in one-to-one meetings.’

This type of tailored service that changes from client to client is something the five partners pride themselves on, he says.

‘We have been very fortunate because we are a long way away from where we thought we would be; but, that being said, this is exactly what we wanted to deliver when we decided to launch our own firm,’ states Wilson.

The rapid growth means that the five original partners – Wilson, Bowes, Chris Cole, Bryan Innes and Toby Alcock – who manage money for the firm, are fast approaching their upper limit for clients; though, in Bowes’ opinion, this will happen in the next 12 to 18 months.

‘What we can now see is that, because we have grown quicker than we envisioned, we are either going to have to stop accepting new clients or we might take on some extra advisers, if we can find the right type of person and they want to join,’ he explains.

‘In each of the offices we would like to maybe have another person so we can continue to grow, but then that would probably be it, so between six to eight advisers. However, it depends on the adviser, if they are comfortable with us and we are able to deliver the service we want to give our clients.

‘We have something special and we know it. We don’t want to break what we have by moving too quickly.’

Part of the reason the firm has been so successful is that it has a specific client base it focuses on.

‘A portion of our target clients are partners in professional service firms, like auditors who require bespoke services that larger wealth mangers wouldn’t want to create bespoke,’ Wilson suggests.

‘When you deal with auditor clients, a lot of work has to go into making sure that their investments are not conflicted with their practice’s work. Because we are small we can do this. We are nimble enough to set up two or three bespoke portfolios for clients, which a larger firm might not be able to do.

‘A lot of the larger incumbents are marketing firms with generic wealth management businesses on the side and are structurally unable to provide this type of bespoke service,’ adds Wilson.

‘We are filling that need, and the fact that so many clients have rushed to Lockhart once we opened our doors is a sign that there is a lot of demand for this type of service.

‘Hopefully they don’t doubt that they will always get our best ideas. But it’s nice to see the clients’ eyes light up when they realise that all the partners are in effect eating their own cooking and invested right alongside them; if they are hurting from a particular investment, so are we.’

Lockhart also targets newly rich clients who need advice on how to grow and maintain their wealth.

Clients can enjoy this service at an ‘attractive price’, although the company declined to reveal the fees it charges.

The reason it can charge what it claims are competitive prices for a bespoke service is because the firm operates a slimmed down back office, says Bowes, adding that thanks to tech innovations they have been able outsource some of their most costly and technical functions. 

‘Technology has absolutely made this all possible. The Best Practice and Fusion platforms have provided us with market leading technology and back office services on an “as we need them” basis,’ he says.

‘It also means that we can focus on what we are good at as we grow our business and we can plug into a network of experts as we need them.’

The company also enjoys the benefit of not being burdened with old technology that it has to maintain, says Bowes.

‘Many of these legacy businesses have large cumbersome technologies with bad data and old systems that often have to be maintained and integrated into new ones at great cost,’ he says.

‘A decade ago you could’ve launched a firm like ours, but it wouldn’t have been as smooth or efficient, as cost effective or safe for a client from a regulatory perspective.’

Despite doubling its headcount, mostly in back office roles, the company expects to continue to outsource a lot of its back office functions.

While the prospect of launching a new firm was scary at first, over the last eight months the team has had a lot of good moments, say Bowes and Wilson.

‘One of the best moments since we launched was when the penny dropped that we had a business with legs and really got underway; that was really evident by the end of September or October,’ says Wilson.

‘When our first client came on board at the end of August, that was another moment. It felt brilliant, especially because we had only met them two weeks prior. It felt gratifying that they were telling us that they trusted us with something as important as their wealth.

‘Another highlight came at the end of November when we realised that we had broken even and we could pay ourselves, our staff and keep the lights on,’ he adds.

‘You can’t underestimate how important that was to us, because people had taken a risk on us with their livelihoods and it’s a massive responsibility.’

Also satisfying is that the clients who have signed up are appreciating the service and recommending it, says Wilson.

‘As our name is becoming better known, we are increasingly being recommended by other professional introducers,’ he explains.

‘That’s a very good sign for us because lawyers and accountants are very careful when recommending services like ours and there are no reciprocal arrangements.

‘The initial feedback was really strong and we have some really committed people who work with us so that the process is really smooth for clients.’

The wealth manager now hopes to further develop its financial planning capabilities, to provide an integrated service for clients.

‘We definitely developed our financial planning service since launching and have a very good technical analyst, Jenni Robinson, who is really helpful to clients,’ says Bowes.

‘It’s really positive to engage with and support clients to the best of our ability, that’s what they deserve.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Insight's Waddington reveals infrastructure plays post-Carillion

Insight's Waddington reveals infrastructure plays post-Carillion

Post-Carillion Steve Waddington is still finding attractive plays in infrastructure.

1 Comment Play Mark Stevenson: oil is the dumbest place to put your money

Mark Stevenson: oil is the dumbest place to put your money

Futurist Mark Stevenson says that investing in oil is not just a risk to the environment but also your investment.

Play Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter