The challenge for any centuries-old firm is to stay true to its traditions and core values, while being progressive enough to ensure that it can meet the needs of the demanding modern-day customer.
Weatherbys Bank certainly has a rich history to tap into, but it is not an institution that rests on its laurels. Business has been booming since the onset of the financial crisis, and the bank is broadening its financial planning offering to include discretionary investment management this month.
Formed by the eponymous James Weatherby in 1770, it is one of only two family-owned private banks in the country, although its roots lie outside of the banking industry.
Roger Weatherby, the group’s chief executive and the seventh generation of family members running the company, explains that his ancestor, James Weatherby, was a solicitor by trade and used to hold the stakes for horse races.
‘In those days, races tended to be between two horses, typically owned by aristocrats, and they would put up considerable amounts of money – often more than £100,000 in today’s money,’ he says. ‘Being a solicitor, he held the money and over time he started to record the times of the races, the jockeys and the breeding of the horses.’
It certainly was high stakes betting in those days. Weatherby says there was one story of two rival landowners, who lived on hills opposite each other, having a race where the loser had to demolish their house. Even one of the meeting room walls in Weatherbys’ West End office tells a story, featuring a reprint of James Weatherby’s record of one early race for 1,200 guineas – around £750,000 in today’s money.
Weatherbys continues to act as the official bank of the British Horseracing Authority, which means that it handles all fees and prize money from small local meets to the Grand National and the Derby.
Because Weatherbys is so integral to the horseracing industry, many of its stakeholders have an account with the bank. In 1994, it decided to make use of this by launching a full banking service, offering cheque books, credit cards and other typical retail offerings.
‘In the short term, we envisaged we would be able to persuade people to do all of their racing business through Weatherbys Bank, but not necessarily all of their personal and business banking with us,’ Weatherby says. ‘As it happened, at this time the high street banks all started closing their market town branches, going the overseas call centre route. From what we call the racing banking, more and more customers started asking us if we can look after their families, estates and businesses. Our traditional banking business grew from that.’
Weatherbys now has around £250 million in deposits with 12,000 account holders. Of these, he estimates that about half still only do their racing banking with the firm, with the other half either solely banking with Weatherbys or using them as one of many banks they use to spread their counterparty risk.
It has been increasingly drawing new clients from outside of the racing world, however. Weatherby says that, overall, around 20% of its customers are from outside of the world of racing, but of its new customers, half are non-linked, predominantly coming from personal recommendations.
The growth of the business led it to set up Weatherbys Private Bank in 2006, which is spearheaded by Adrian Crichton. The business saw a 40% upsurge in deposits in 2008 when the financial crisis took hold, as investors sought a safer haven.
‘We have been growing strongly, but very conservatively, to produce something that the next generation can carry on,’ Weatherby says. ‘We do not have the pressure of outside shareholders and we do not want to get so big that we lose the level of service that sets us apart.’
He admits that in the initial stages of the crunch he feared that they would be seen as sub-scale and therefore risky. However, these concerns proved very short-lived as strings of investors made new deposits that were well above the then £30,000 compensation limit.
As more and more started to request a wider range of services, the bank brought in a team of financial planners.
‘To encourage our racing clients to do all of their banking with us, we had to offer a wide range of services,’ Crichton says. ‘We introduced a range of deposit products, our own cash management service, tax planning and revamped our foreign exchange services.
The discretionary investment management service, which is being launched this month, represents the ‘third leg of the stool’, alongside Weatherbys’ banking and financial planning offerings.
Roddy Buchanan, who was previously head of wealth management at Ansbacher, is leading this new investment service. He admits that the timing has been good, in terms of coming to market without a legacy business and knowing the lie of the land with the retail distribution review, saying that all of the group’s offerings are already fully RDR compliant.
It certainly completes the bank’s total offering, which also includes a horseracing VAT reclamation service and a credit arm.
‘On the tax side, if your horse is sponsored, you can reclaim back VAT. It is a very complex process, but one with which we are very familiar, being the second biggest sponsor of races by volume,’ the bank says.