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The next generation of boutiques: Prospect Wealth Management

The next generation of boutiques: Prospect Wealth Management

After battling the elements in the recent relentless storms, I made it to the heart of the City, Lombard Street, to meet Matthew Hunt of Prospect Wealth Management, writes Libby Ashby.

He has more than 30 years of experience in the financial services industry having worked at Morgan Guaranty, Chemical Bank, as well as being CIO at Coutts. He then launched Close Brothers’ wealth management business followed by time at Dryden and Fortis, before deciding to go it alone. ‘I was tired of the revolving doors of the City and I wanted to set up my own firm to work in the way I wanted,’ he told me.

So in 2006, with the support of Raymond James, he set up Prospect Wealth Management. His idea, as made clear in the company motto, was that institutional methods and standards can be used for the private investor.

At Prospect, Hunt and his team quantify risk because he believes ‘quantitative methods work well with both institutions and private clients.’ While quantitative processes can be complicated, he is keen that clients know the investment process he uses with their assets. He told me: ‘We want our clients to understand what we’re doing so we take the time to explain our processes to them in terms they can relate to.

‘Our process of risk profiling and having meaningful benchmarks specific to the risk and return profile of each portfolio is attractive to professional intermediaries and their clients.

‘No one thinks of the trade-off between risk and return but we do. I don’t believe in simply segregating clients into low, medium and high risk. What is high risk to me might not be high risk to you; blue chip stocks, for example, might be suitable for one person but not for everybody.’

As well as quantifying risk, Prospect has a range of model portfolios, which enables ‘all of our clients to get our best ideas’, Hunt told me. Most of the firm’s clients come through intermediaries and he explained: ‘Our average [end] client is either retired or nearing retirement and they are usually in the mass affluent space with funds between £100,000 and £2 million. We do have portfolios with less than £100,000 and over £2 million so we cater for a wide range of client types.’

When I asked what differentiates Prospect from its counterparts, he said: ‘Unlike many of our competitors in the mass affluent space, we also invest directly on behalf of our clients. Buying direct gives us flexibility; being nimble helps us outperform.’

There are still hurdles for the firm to overcome, however. ‘The challenge for us is to get Prospect’s message out to as many people as possible,’ he said.‘Two major changes in the industry have been the retail distribution review and the emergence of platforms. We want to reach out to intermediaries, including lawyers and accountants, to show them that our quantitative methods perfectly suit their outsourcing needs.’

Not only does Prospect use institutional methods for private investors, it enjoys also two crucial benefits of being a boutique firm. ‘The first is investment flair. Large national firms have layers of investment committees so it is difficult for them to make quick investment decisions,’ said Hunt. ‘Prospect has the capability to make a quick decision, which is also backed by rigorous quantitative methods and processes. ‘The second is the level of personal service we offer. It is much better for a client to phone in and speak directly to their relationship manager rather than going through call centres.’

Finally, we discussed his vision for the company. ‘We want to grow the firm while remaining true to our principles,’ he said. ‘Our business model is scalable – it would work with assets under management of £500 million just as well as it would with assets of £1 billion.’

KEY FACTS

Name: Prospect Wealth Management

Year founded: 2006

Location: London

AUM: £150 million

Principal: Matthew Hunt

Number of employees: 11

Number of clients: About 500

Company motto: ‘Institutional standards for the private investor’

If you'd like to arrange a meeting, email me on lashby@citywire.co.uk

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