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Profile: how this Swiss bank has doubled UK business since 2016

Profile: how this Swiss bank has doubled UK business since 2016

Duncan MacIntyre has been drawing inspiration from Mexican painter Frida Kahlo as he gets to grips with his latest challenge.

Over a decade on from launching Coutts’ Private Office, he has been tasked with building out Swiss private bank Lombard Odier’s UK division.

A culture aficionado, he says the industry can learn a lot from the creativity and drive of maverick artists.

‘Frida Kahlo is my other great passion. She was a woman of huge courage and huge determination and tenacity, and frankly in the world that we are now in that is very important.’

Translating this into wealth management, he says that given the geopolitical tensions around the world, there is an opportunity for London to capitalise on its reputation for stability and the rule of law.

He also points to the simplicity of Lombard Odier’s business model, at a time when mistrust around the banking sector remains elevated.

‘My job is focusing on the ultra-high net worth businesses and Lombard Odier is a pure manifestation of that,’ he says.

‘Lombard Odier is a privately-owned business. It’s owned and run by seven managing partners and they have asked me to grow and develop the UK business, which is why I was brought in.’

It has been two years since MacIntyre joined the firm and the business has grown to manage a UK resident base of £7.3 billion.

In the last year, the bank has seen what MacIntyre describes as ‘some very pleasing growth numbers’. The group as a whole saw its assets under management rise by 17%. London office saw 31% growth in assets.

The figures prove that the UK business is on an accelerated growth trajectory and MacIntyre has further plans to continue that. With 12 senior bankers on the platform currently, he is looking to increase that ‘quite considerably’.

However, one of the side effects of running a business in the UK at this point in time, is having to deal with questions around Brexit. While admitting the uncertainties, MacIntyre believes that having a Swiss parent, which understands what being outside the European Union is like, is an advantage in this regard.

‘London is a core onshore and offshore jurisdiction and we absolutely believe that that market is going to continue,’ he says.

One of the challenges he has faced at the helm of Lombard Odier’s UK business is improving brand awareness.

‘We have all the attributes, I think, but one of the challenges is we need to increasingly raise the awareness of Lombard Odier in the UK market. It’s a very well-known business in Switzerland and most of Europe, and in particular in the Francophone world.’

The firm has been increasing its spending on marketing, however, this does not mean that it is looking to become a retail brand. MacIntyre is targeting clients with over £4 million.

‘We manage money. We are true wealth managers, both discretionary and advisory, and we are not looking to provide a full range of retail services,’ he explains.

This is because he believes that when clients reach a certain level of wealth, they actually look to have a clear separation between service providers.

‘If you can afford it, you go to a specialist accountant, lawyer, art advisers, clothes makers and specialist investment managers,’ he says.

While his clients have similar levels of wealth, MacIntyre recognised the geographical split and within his first year installed a team to specifically focus on this.

Hiring a team of six from a number of places in 2016, including Deutsche Wealth Management and SG Hambros, he underlined his commitment not just to the UK market, but to catering to international clients as well.

‘We have a business here focusing on new markets which are the Russia CIS [Commonwealth of Independent States], the Middle East and Turkey.

‘We then have a European business which focuses on the Francophone and Austro-German clients living in the United Kingdom. And then we have a United Kingdom business which is focused on UK resident and UK resident non-dom.’

He adds: ‘London is and will remain, in our opinion, a core world wealth centre. People come here for the resident non-dom tax status, they come for the safety and security of the UK jurisdiction, or for educational purposes, or all the diversity in London - it is a hugely diverse city that attracts people from every nation under the sun.’

MacIntyre says that he is seeing increased interest, especially from affluent Turks looking to relocate to the UK, as well as from Russian CIS countries and the Middle East.

‘In the Middle East, unfortunately as instability increases, there is always that desire to make sure that your assets are in a more stable jurisdiction and London is inherently that.’

So, the UK remains the key growth area for the business and while the regions are on the radar, the focus remains very much on the capital.

‘We have more than doubled the bank’s book in the last 18 months. We have been hiring particularly in the UK space. We go to the regions all the time. Our bankers are travelling continuously in parts of the UK,
but we are looking to have a centre of excellence here in London.

‘We do not have that retail angle, we are not providing day-to-day checking services. So we do not have a flow of retail work where people have a check in relationship with you because it is a pure investment management relationship.’

In addition to the company’s investment management proposition, Lombard Odier also operates a technology platform for other smaller private banks.

‘The technology platform is a very important part of our business. One of the things that we fundamentally believe in is that producing technology is the future of private banking,’ he claims.

‘We now are in the process of providing those services to other smaller private banks and asset managers so that it becomes a revenue positive business for us and that allows us to invest a considerable sum of money every year into developing it,’ he says.

‘These are small offices, family offices or asset managers who do not have the technological capabilities. We take their clients on and delegate services back to them, so we are providing their middle and back office.’

This side of the business was launched in London about a year ago, after already being established in Switzerland, and MacIntyre is pleased to report that it has already attracted considerable, albeit undisclosed, assets.

He argues that because of Mifid II, banks across the spectrum have had to reconsider their technological capabilities, given the additional reporting requirements introduced by the legislation.

‘Some have had to limit their services because they do not have the technological capabilities to deliver things like trade suitability reports for advisory relationships and we can do all that.

‘Having a fully Mifid II compliant platform allows us to provide a service to others that do not have it and this is clearly an opportunity in the marketplace.’ 

 

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