Given it is in Zone 6 and only a stone’s throw away from London, one might ask why Walker Crips needs an Epping branch.
Office principals Bill Newton and Andrew Powell say they saw a gap in the market for investors who would rather not spend half an hour on the Central line, however.
The duo left Barclays Wealth for Walker Crips in the summer of 2014, following the path trod by their two colleagues Steven Moss and Mark Entwistle – who also now work in the Epping office.
‘We came over about three years ago from Barclays. The four of us were the core part of the advisory dealing desk at Barclays,’ Newton explains.
‘The driver behind the move was Barclays’ attitude – like a lot of the industry: the investment size and type they wanted to offer was changing.
‘Their minimums for investment were going to increase considerably, and also I think the general interest in doing advisory-type business was waning – that is something that we’ve seen a lot.’
The pair also felt the investment services being offered by the big banks to mid-range clients had become homogenised and automated, without even a direct line to an investment adviser or discretionary manager.
At the other end of the spectrum there are robo-advisers which he sees as really targeting young investors and not filling the gap left by the banks, Newton notes.
‘What we are saying is there are still a lot of people that want to invest with somebody they know.
‘We are trying to access these people who don’t necessarily do it all themselves online but perhaps don’t have half a million to invest – maybe they have a few hundred thousand to invest. We think that is a good area to target,’ says Newton.
Powell explains they wanted to find somewhere where they could ‘hit the ground running’.
‘With that in mind, we wanted to go somewhere we felt was going to be more suitable for clients and also the type of business that we offered,’ says Newton.
‘Walker Crips was a perfect fit, a 100-year-old broker very much committed to investment management both advisory and discretionary.’
He added the firm offered the duo the autonomy to run the business the way they wanted to run it.
With Powell born and bred in Essex, and Newton now also living in the county, being able to base the office in Epping felt to the pair like an extension of that autonomy.
‘We set up in the summer of 2016, although it is the Epping office we are really targeting wealth in Essex and Hertfordshire,’ says Newton.
‘We see those as affluent places with lots of entrepreneurs and geographically it made sense for us from the perspective that we live there, so that’s good.’
Powell adds: ‘Epping is geographically nicely positioned between Hertfordshire and Essex and those areas have very good transport links for clients.
‘People assume that because it is geographically very close to London people would naturally access the City, but we find clients are a lot more willing to go to an office locally rather than getting on the train travelling to London.’
Powell explains the further attraction of the two counties of Hertfordshire and Essex is a strong tradition of wealth creation and entrepreneurship.
A lot of cash is made in face-to-face, relationship-led businesses he notes, and these clients prefer to be able to pick up the phone than having to interact with an algorithm.
‘They may be business owners, who don’t have the ability or time to invest, to research prospective investments. So that’s why we think they would want to speak to someone whose job it is to do the research and do the legwork behind the investment,’ says Powell.
Newton explains: ‘There are some areas which have been very much disrupted by technology and inevitably in financial services that’s happening, but there will be a huge demand for people who want to interact and talk through their investment decisions.
‘Business owners are used to making decisions and being heavily involved in their money. So they may be willing to give over discretionary powers to a manager, but they also want to speak to somebody regularly about what’s going on and be kept abreast.’
Powell says: ‘As Bill says, they are very time poor because they are running their own business at the same time, so they want to interact with somebody they can trust and feel comfortable with.’
This approach seems to be building momentum, raising £42 million of new client money in the last year to bring total assets under management to £280 million.
‘It was a slow process because we only really used one avenue for marketing to introduce ourselves,’ says Powell.
‘What we wanted to do first of all was slowly introduce ourselves to the area and to let people know they don’t have to travel to London to meet somebody who is engaged in the markets on a daily basis.’
Newton chips in: ‘It was word-of-mouth really. We actually won quite a few referrals from existing clients who had friends and family in that catchment area.’
Now, Newton feels the office is established enough for them to start directly marketing to business owners who will become their core client base.
‘For us now, business owners are our main focus for new business. We are embarking on a more direct marketing campaign, trying to approach business owners in the area over the next 12 months. I don’t see any reason why we can’t pick up £50-£100 million worth of assets in the next 12 months.’
Currently, 10% of the office’s AUM is made up of clients from Essex and Hertfordshire, with the balance for London-based clients. Newton and Powell are pushing to get that figure up to between 25-30%, however.
Although both Newton and Powell obviously favour a personal touch, they admit that the industry faces challenges from rising costs and regulation. These pressures are at least partly why firms are starting to shed advisory services, but they are convinced technology will answer some back office issues.
This is one of the reasons the duo were excited about the promotion of the firm’s group managing director Sean Lam to chief executive officerat the end of August, filling a role previously held by Rodney Fitzgerald.
‘Our new CEO comes from very much a sort of infrastructure technology background, so that’s very useful for us. The way to adapt is through technology,’ states Newton.
‘It is early days yet. But the fact that he has a very strong technical background, I think that is an indication of what we are looking for in terms of adapting the industry and building systems that work for us. So I think that is probably the main skill set he is bringing.’