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Wealth Manager: Charles Stanley's Guildford head on local opportunities

Wealth Manager: Charles Stanley's Guildford head on local opportunities

Despite only having decided to up sticks and change jobs once in his career, Charles Stanley’s Charles Turton has worked for a surprisingly large number of private client managers in his time.

Few other sectors have seen as much consolidation as financial services over the years and Turton’s Guildford office could almost be used as a barometer of the changing face of wealth management over the past two decades.

After graduating from Durham University, he joined the local office of Greig Middleton in 1994 as a trainee stockbroker. The firm later merged with Allied Provincial, before being acquired by Gerrard Vivian Gray and merging with Capel Cure Sharp to morph into Gerrard Investment Management and then later Barclays Wealth in 2003.

The last change of ownership ultimately proved decisive, prompting him to move over to Charles Stanley in 2007 to help set up its Guildford office. His colleagues soon followed.

‘I’ve only moved once, but have experienced at least four different work cultures,’ he says. ‘Through all of that, the important thing has been the continuity of staff and access – if the clients trust you as an investment manager, they will stay with you. We have lost very few clients over the years.

‘After we were acquired by Barclays, the first two years were pretty positive and things looked like they were pointing in the right direction, but the next two were less so. I was generally unhappy with the direction the firm was moving in – the centralisation and prescriptive portfolios.

‘We had brief retraining as private bankers and there was an expectation that we would sell the bank’s products.’

The office was not short of suitors, being long established in the affluent Surrey town, but it was Charles Stanley’s proposition that won Turton over.

‘It is a truly independent firm with no large single financial backer and it is committed to remain independent,’ he says.

 

‘I was wary of joining a smaller firm then running the risk of it being taken over by a larger firm in the future. It has a strong brand, is respected, produces excellent research and has a strong focus on service, as has been recognised at the Starmine awards.’

The continuity and stability that has followed the team’s switch to Charles Stanley has been welcome, although branch head Gavin Brackenridge is looking to retire in about 18 months in a change that will see Turton take over the running of the Guildford operation. He stresses it will be business as usual after his promotion, saying the office has a collegiate, open-plan approach where he works closely with long-term colleague James Stewart-Smith.

In total, the office has a headcount of eight, with five investment managers and three support staff. It runs about £300 million in assets, split between its discretionary, advisory and direct offerings, with 100% recurring income as it is purely fee-based. The largest single client is worth £12 million and Turton says that clients range right across the spectrum from that figure down.

As a local man, having been born in nearby Dunsfold, and having worked in Guildford for more than 25 years, Turton is well positioned to describe the town’s evolution as a wealth management hub over the years.

‘It was fairly underbroked 10 years ago, but there have been a number of firms moving into Guildford focusing on investment management,’ he says. ‘If anything, we view it as a positive. A very similar thing has been happening with accountants and solicitors.

‘It is a wealthy area and we have all worked locally for the past 25 years. Between us, we know all of the local agents and intermediaries, but the growth in competition is a positive as it means everyone has to raise their game.’

 

As an office, Guildford has traditionally seen a large portion of its clients come in through IFA referrals. Accordingly, Turton says the team is well versed in handling the ‘nuances’ of that type of business flow and the level of service expected.

Turton says early stage meetings with clients focus heavily on determining their long-term objectives and deriving their attitude to risk from that as a starting point to building their portfolios.

Charles Stanley produces its own in-house research covering economics, funds and individual stocks from which the team draw heavily, although they do access some external research as means of cross-referencing.

The group’s analysts produce preferred stock and fund lists, but Turton says the team has plenty of autonomy within a risk management overlay. The asset allocation is also aided by a weekly strategy call that all of Charles Stanley’s offices can dial into, with individual equity and fund updates sent out regularly.

‘We tend to use direct equities for our UK blue chip core exposure and collectives for specialist areas, such as commercial property, small caps, international equities, absolute return and hedge funds,’ he says.

‘Ideally we would like direct fixed interest exposure, but with the vast majority of decent quality bonds trading above par, we have been looking at collectives more.

‘A lot of companies have been targeting institutions more with new issuance and many have had £100,000 minimums, which is too much for a lot of our clients. It would be nice to see more issuance.’

Gilts are also bought direct, but Turton is wary, saying that while his firm, like many others, was caught out by their performance last year, he wouldn’t buy in at current levels.

‘It is just a matter of when, rather than if, yields rise,’ he says. ‘They were the big surprise of [last] year, but we feel that at current levels they are too big a risk to hold within client portfolios. You cannot guarantee there will be enough signals that enable you to get out at the right time.’

 

More broadly speaking, he is cautiously optimistic about the outlook for 2012.

‘In terms of new business, we have had a good start to the year, helped by the positive markets early on and the continued low bank deposit rate,’ he says. ‘We are hoping for positive outcomes for the year as a whole. The UK is back in a technical recession, but it may well be that the UK economy muddles through, the eurozone is held together and the next US president tackles its deficit problem.

‘The way to deal with threats to client portfolios is to have diversity at every level in terms of asset classes, stocks and geography.’

Turton says a lot of this isn’t rocket science, such as the focus on dividend-paying blue chips with strong balance sheets and cashflow, with major holdings including the likes of GlaxoSmithKline, Vodafone and Royal Dutch Shell.

Outside of work, he is the director of local heritage and community charity the Charlotteville Jubilee Trust, which recently raised sufficient funds to restore the Spike, a historic building that was once Guildford’s vagrant ward, including the largest single National Lottery Heritage Fund grant in 2005/2006. ‘They have still got some of the old cells and four of the grilles that they had to break stones and pass through to earn their gruel,’ he says.

Now it has been relaunched as a successful community centre, where it hosts everything from kick boxing lessons to Buddhist gatherings, reflecting the eclectic mix of people that now live in Guildford.

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