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Wealth Manager: Charles Stanley's twin track to success in Brum

Wealth Manager: Charles Stanley's twin track to success in Brum

The Venner twins’ overhaul of Charles Stanley’s Birmingham office is bearing fruit with the branch now the fastest growing in the wealth manager’s national network.

The transformation has been stark. Historically, the company’s presence in the second city was negligible until the acquisition of IFA firm Jobson James Financial Services in a £2.25 million deal back in May 2011.

Fast forward two years and what was a small eight-man outfit running purely discretionary money is now a bustling 32-strong team offering the full spectrum of client services.

Richard Venner, who had run Jobson James and moved across as part of the deal to head the office, is adamant the changes he has put in place should be the blueprint for the wealth management industry.

‘We were a leading financial planning firm and we want to be a leading complete proposition in Birmingham. We have a great platform through which to grow and we believe we will grow substantially over the coming months and years,’ he says.

‘I personally believe that the model we are creating will be the model of all wealth management firms and not just Charles Stanley.’

It was this conviction that the full service approach was the future - coupled with the impact of the retail distribution review (RDR) - that prompted Richard Venner and his brother Tim to sell to Charles Stanley.

While Jobson James enjoyed considerable success as a standalone business offering financial planning, corporate advice and employee benefits, the pair felt the regulatory changes afforded a much wider opportunity, which teaming up with an established discretionary manager could help them capture.

‘In 2009, as the RDR took shape, we thought that as an independent firm with £250 million under influence and a £2 million turnover, we were not big enough to take advantage of the opportunities.

 

‘The one missing piece of the jigsaw was investment management, which would improve our proposition,’ Richard says.

‘We had model portfolios but they were advisory and it was very inefficient. Clients want financial planning and we coupled that with investment management.

‘When we were exploring opportunities in the marketplace in 2009, we had several offers for the business. The reason we sold to Charles Stanley was quite simple: the cultural fit and the shared vision of where we can go in the future.’

The Venners have a good track record of calling the future shape of the market, with Richard having taken Jobson James fee-based in 2002 and launching advisory model portfolios onto a wrap platform in 2005.

He firmly believes any wealth manager offering just discretionary services is not only missing a trick but also leaving their client bank vulnerable to IFAs.

‘Between them, Charles Stanley, Brewin Dolphin and Rathbones probably have 40,000-50,000 clients and they have the opportunity to introduce financial planning to them, be it inheritance tax (IHT) planning, school fees or whatever,’ Richard says.

‘You can’t tell me that someone who is in their 80s with a £4 million portfolio and knows they are going to have to pay IHT doesn’t want some advice. The market needs to look at itself. It is startling the complacency of wealth managers allowing the IFA market to sell into their clients. If you don’t protect your clients, you will see their numbers diminish.’

Tim Venner accepts the cost of running a combined financial planning and discretionary asset management proposition is much higher than running just discretionary alone, being far more labour intensive. However, he describes it as the ‘most sensible’ approach to running money, stressing that investment management should be seen as a service of financial planning and not viewed in isolation.

 

The branch effectively operates what Tim dubs a ‘pod system’, with the aim being that a £50 million client bank will be serviced by an investment manager and a financial planner supported by a paraplanner.

The pair say they each receive several CVs a week from disillusioned IFAs looking to join the growing Birmingham branch. They are in the happy position of being able to cherry-pick the best local talent – ideally those that can bring in £35 million-plus books of business.

‘The culture of recruitment has changed,’ Richard says. ‘It used to be about what revenue they can bring in, but now it is about assets under influence. We wouldn’t take anyone with less than £20 million assets under influence.’

The Birmingham office has taken on three new staff in the last month alone, with Nigel Goodhand joining from Royal Bank of Scotland, where he specialised in IHT planning for high net worth clients, paraplanner Prithpal Saimbi, who moved over from Clay Rogers & Partners, and Joe Fletcher, an intern.

A combination of new faces and organic growth has helped the branch’s (undisclosed) assets soar by 50% since the start of June.

The pair have a number of big ticket clients in their sights who are expected to come on board soon, with the firm reaping the rewards of the RDR and a shakeout from the banks.

‘Post-RDR, a lot of IFAs were like rabbits caught in the headlights, thinking “how do I get my head round this?” There are clients leaving IFAs now because of the transparency. If the IFA was taking 0.85% commission and now has to invoice for £8,500, a lot of clients are asking “what am I paying that for?”’ Tim says.

‘We have been taking on clients from banks who were paying 3% on £1 million, so they were paying £30,000 even just for an investment bond, which would take no more than 10 hours’ work,’ Richard says.

 

‘It’s good for our clients because they are getting all of these services for a single cost and not paying extra for the privilege. This highlights the value of wealth management.’

The firm typically sees clients twice a year and are meticulous in their approach to the whole client experience.

‘You need to think about when a client comes into the office: how are they greeted? How does the office look? It is building an impression of what your business is about,’ Richard says.

The team moved into the new offices earlier this year and the smart interior now carries the Charles Stanley branding and colour scheme, while reflecting the brothers’ passion for sports with a range of rugby and cricket memorabilia adorning the meeting room walls.

Most of these were bought at local charity auctions and the Venners emphasise the importance of regional offices embedding themselves in their community.

‘There are a lot of professional services in the city – Birmingham has more professionals under 25 than anywhere else in the UK,’ Tim says. ‘We are very close to private client lawyers, accountants and family offices, but are very selective in who we deal with.’

The branch also supports a number of local charities, including the Black Country Charity Foundation, which supports people in deprived areas of Birmingham, as well as the Acorn Hospice and Debra, Charles Stanley’s charity of the year, which help individuals suffering from the skin condition epidermolysis bullosa.

But the Venners are not just paying lip service to these good causes, having won the crown as Charles Stanley’s charity champions last year by raising over £35,000.

Beating that target this year is just one of the things on their agenda. Being 47 years old – the brothers were born just 10 minutes apart – they insist they are just scratching the surface of the opportunities in Birmingham and will continue to power the business forward for years to come.

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