In an industry with low barriers to entry, differentiating your business from the competitors is a natural necessity. But for Simon Davies, the founder and chief executive of boutique private bank SC Davies, breaking the mould and providing a unique service has been a lifetime ambition.
He began his career at Lloyds but says that his formative years were spent at SG Warburg. The story of the company’s founder SG Warburg had captivated him at school.
‘As a non-establishment figure – a German Jew – who founded the bank in 1940s, as well as someone who wanted to innovate and was motivated solely by the desire to break the City mould rather than grandiose richness, he really inspired me.’
For a young lad brought up in Yorkshire’s quiet moors, a step up to a bustling London merchant bank was a big life event, Davies says
‘They paid for my further education while requiring me to turn up and do a job. It was a fantastic system of giving you experience and complementing it with qualifications.’
Davies says a five-year stint at Warburg was an excellent grounding in the way markets operate. He began in the Eurobond trading department before moving to the banking and investments division.
In 1995, aware that he wanted to gain experience in a smaller business, Davies joined Berry Asset Management as an investment manager.
Despite the appreciation of the business that Jamie Berry had built over nearly two decades, Davies says his desire to do things differently and mould the client offering to suit his vision had made him something of a ‘disruptive influence’ towards the end of his time at Berry.
‘You start developing ideas about how to do things differently and you start preferring your own team around you. There is only so long that you can be in the business before you do your own thing.’
Towards the end of 2004, Davies, alongside Paul Denley and Hugh Scotney, respectively chief investment officer and chairman of SC Davies, founded the wealth management boutique with two key principles.
‘First of all, the business had to be independently owned. It couldn’t be owned by other financial services institutions. If you achieve independent ownership, it allows you to be client focused and make decisions without the pressure from big brother to use their products or give our profits to them.
‘The other aspect was the balance sheet. From the start, that was absolutely key to us. Clearly, you start a business to grow, but we have never desired growth funded by debt.’
Behavioural finance, meanwhile, is another large influence within SC Davies’ investment process, as is the notion of intelligence-led investing.
Davies explains: ‘Intelligence-led investing refers to part of our process, focusing not just on financial research but also on intelligence gathered on geo-political and international trends – we believe this also helps set apart our DNA from the peer group.’
Davies says the company’s hiring process purposefully strives to identify individuals who have had different career paths with interesting stories to tell. He notes this is rooted in the creative advice element, which can add value beyond investment management.
‘How can you provide creative advice if you are single-track knowledge based? One of the things that makes people interesting is the breadth of their experience.
‘I think we can make a difference in the breadth and depth of advice we can give on a variety of life topics. That’s an absolutely core aspect of what we strive to do.’
SC Davies clients either fall into the ‘Mosaic Bespoke’ or ‘Mosaic 25’ service. The former opens up at £750,000, while the latter offer is capped at 25 families, acting as a family office-type service for ultra-high net worth individuals.
‘Someone within Mosaic Bespoke is coming in with a pot of money to be invested, whereas someone in Mosaic 25 is coming with a range of needs, of which investing and banking are only two.’
The boutique private bank also offers a cash-management service, Mosaic Money, which begins at £1 million. Towards the end of the year, the company is set to formally launch Mosaic Access, an entry-level service designed for the intermediary community.
‘Mosaic Money will be an Oeic-based investment solution for intermediaries who in the post-retail distribution review world will not want to be involved in running money. It’s an opportunistic decision on our part.’
While Mosaic Bespoke, Mosaic Money and Mosaic 25 are limited by how much they can grow because of the focus on individual clients, Davies says Mosaic Access does not suffer from the same problem. ‘Our strategy is to have a business stream which is genuinely scalable’, he points out.
In fact, Davies says nimbleness is an advantage the firm has over large private banks. ‘Blending scale and client primacy is difficult. If you’ve got a small business, you’ve got to be creative because you haven’t got a high-street branch sending customers to you, like Barclays Wealth. You have to come to clients and say, “Have you thought about x or y?”, rather than, “Here are four brochures to think about our service”.’
For someone who has been living and breathing the City life since teenagehood, it is unsurprising that Davies finds it difficult to turn off his interest in work. ‘The switching off comes by the way of experiencing things that are different to your day job, those unique life experiences’, he says.