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Wealth Manager: Quilter's head of regions on building a sustainable national network

Wealth Manager: Quilter's head of regions on building a sustainable national network

Quilter’s broad geographic spread may be the envy of many wealth managers that aspire to have a national presence, but it did not happen overnight, being nearly two decades in the making.

David Loudon, now head of the group’s regional branch network, was the pioneer of its national expansion, brought in to head its first office outside London, which was opened in Birmingham back in 1994.

‘My brief there was to see if the regional office would work for Quilter,’ he says.

‘The regional offices started 18 years ago and are now a major part of our business. Birmingham was the first regional office and we are now managing £1.3 billion out of it, which is a significant amount for a regional office.’

Since then, Quilter’s branch network has expanded considerably, and 11 regional offices give it a presence in all of the home nations. With three of those being opened in the last three years – Salisbury in 2010, Edinburgh in 2011 and North Wales in 2012 – it might look as if the strategy is gathering pace, but Loudon insists the plans were all many years in the making.

‘We have had a period of very strong growth in our regional offices, but it takes time,’ he says.

‘In Edinburgh for example, we had been seeking out the right team for some years. We needed to find a team with the same philosophy as the rest of us at Quilter. We found Alan [Aitchison, head of the Edinburgh office] and built a team around him.

‘It is going very well – it’s a very good fit of experience and talent – and we expect to see it grow significantly both in terms of clients and investment managers.’

In contrast, the most recent launch – that of the North Wales office, which opened in January – was more borne out of improving the service the firm offers its existing clients than being a purely geographic expansion.

‘Going back years we found our Liverpool office was effectively servicing Wales and some of our clients used to travel a long way to see their investment manager,’ Loudon says.

‘If we can provide a regional office it goes down well. We are providing a service based on a very central offering; the DNA is very similar and that’s what it should be.

 

‘It doesn’t matter what their location is, clients come to Quilter and get the same level of service that they would have had to travel many miles for in the past,’ he adds.

Similarly, the Salisbury office caters for a number of clients in the South West who were previously serviced out of Quilter’s Bristol office, while also being a regional hub that provides access to the solid wealth base in the likes of Winchester, Marlborough and Southampton across Wiltshire and Hampshire.

Quilter also has offices in Belfast, Glasgow, Leicester, Liverpool and Manchester as well as offshore offices in Jersey and Dublin. But how does a firm looking to build a successful branch network set about the task? Certainly, plenty have tried and failed, opening branches with a fanfare only to close them down within two years after struggling to attract assets.

‘Geography does come into it,’ Loudon says. ‘When recruiting, first all of you have to identify the right people to lead the office and they need to be both part of the community and wanting to move.

‘Then when you get to that stage, you need to find the right people to add to the team and make sure they are the right fit. It has taken us 20 years to build our regional business, it doesn’t happen overnight.’

The emphasis on people is an ongoing theme in the conversation and Loudon draws on his own experience to support his point.

After starting out at Peat, Marwick, Mitchell & Co, which later became KPMG, in auditing, he found he was primarily involved with helping stockbrokers and he made the switch in 1980, joining City broker Greenwell. Moving to Smith Keen & Cutter in Birmingham, he then switched to Quilter in 1990.

‘Having historically been a Birmingham investment manager, I know the area has historically had a lot of wealth managers – it really comes down to the people. If you have the right people then you will be there for the long term,’ he says.

‘There have been a number of firms that have opened regional offices and then realised that they either don’t have the right people, or lack the infrastructure in place to support them. We have the technology and the support, and we keep adding to that.’

 

When the team is in place, the next step is to ensure an office is in the right part of the city and Loudon says the firm uses the knowledge of the incoming team as well as taking advice from local estate agents.

A case in point is the Edinburgh office, which last month moved premises from St Andrew Square in the East End of the city to a more central location in Castle Terrace, close to the Scottish capital’s most famous landmark, rather than following many firms out of the centre.

‘Our requirement was 3,000 square feet in a serviced building,’ Loudon says. ‘It was difficult, but we found one near the castle and we are very excited. Some businesses have been moving out to Edinburgh Quays, but we wanted to be in the heart of the city. We want somewhere that clients can get to easily and where we can hold seminars.’

Putting the teams and offices in place is one thing, but keeping them in situ and then expanding them is another. Loudon says communication is key to building longstanding relationships with the regional office heads, pointing out that he has worked with many of them for more than a decade.

Although Quilter runs a centralised investment process with stock and fund research carried out in London, it believes it is crucial that the voices of the wealth managers around the country are listened to.

Loudon says chief investment officer and former Wealth Manager coverstar Duncan Gwyther and the research and analyst teams regularly visit the regional offices, and will also host or attend client lunches and dinners in different locations.

This is supported by the circulation of internal research and regular communication by video and email between the branches and head office to ensure it is a two-way process.

‘You need to involve and communicate with the regional guys and work with them to develop regional strategies,’ Loudon says.

‘It is a balance, there needs to be a house view, but with input from around the investment management community we have fostered in the company. Mere dictats from on high can have a negative effect. It is important you do communicate with the regional guys because if you don’t, there is always the danger of flight risk.’

 

While the regional investment managers have input into the investment process, their local knowledge when it comes to expanding their teams is paramount.

Loudon says the office heads are tasked with keeping their ears to the ground and knowing their peer group, which normally ends up being the best way to secure introductions to the type of individual they might want to hire.

He is also keen to highlight the infrastructure and technology the group has invested in and is particularly proud of ‘Quarrier’, its proprietary back-office system. This logs all client notes and their investment history and enables the investment managers to access this at the push of a button.

While saving time, it also facilitates compliance, meaning suitability issues around decisions can easily be assessed. This is done regularly through the firms’ peer review practice.

On the subject of regulation, Loudon points out that the firm’s staff, being a ‘competitive lot’, are ‘99%’ ready for the retail distribution review with some staff having done gap-fill and others having taken exams.

‘Most have gone beyond the minimum requirement. We have had quite a few years for the preparation and planning,’ he says. ‘You get on with it and don’t leave it to the last minute because that is when problems arise.’

Some six months on from the firm’s private equity-backed management buyout, the firm is once again independent and positioning itself for the future.

‘The name over the door has changed three times in 10 years or whatever, but the people haven’t. It is almost the way of the world. A lot of entities change ownership and their name,’ he says.

‘Ultimately, it is about the client and if you have got the relationships in place and are delivering a service, it is not a problem.

‘We have got people who still refer back to Quilter Goodison [what the firm was named in the 1980s] so the name over the door clearly doesn’t worry a lot of clients.

‘Quilter has been around since 1771 and the changes have had less of an impact than you might think.’

* This interview was conducted before Quilter announced it was in advanced dicussions to buy Cheviot.

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