Further change could be in store for Barclays’ Wealth & Investment Management (W&I) division, following the news that chief executive Peter Horrell is to leave the business after less than a year in the role.
Horrell (pictured) took over from Tom Kalaris in September last year and overhauled the wealth proposition, with an estimated 40% reduction in UK headcount.
He also introduced a new ‘private clients’ bracket for sub-£500,000 clients, which was served by a call centre.
Horrell is to step down from his role at the end of the year, having spent the past 23 years at the bank. A spokesperson for Barclays said the bank is actively looking for a successor. Having implemented these tough decisions, what lies ahead for the business?
Some commentators view Barclays’ decision to fold its W&I business into its retail unit, home to personal, corporate banking and UK retail, as a signal that wealth management is no longer a core focus.
The strategic overhaul and decision to no longer have Barclays W&I as a standalone business contrasts sharply with so-called ‘Project Gamma’, which was introduced under Kalaris in 2010. This involved a £350 million investment in the business through a new IT platform and large scale private banker hires, seeking to make Barclays a dominant force in UK wealth management.
‘The jury is out in terms of where the business is going. It feels like the whole of Project Gamma is withering on the vine and becoming de-emphasised,’ said Christopher Wheeler, banking analyst at Mediobanca.
He also expects to see greater synergies between corporate and private banking and the co-location of the two teams in more branches in the future.
‘Again, you get a feel that this business is moving further and further back. I am not sure we will have Barclays committed to doing anything other than provide services to [existing] ultra high net worth clients. They don’t have the wherewithal in the high net worth segment,’ he said.
Overall, he expects to see further scaling back in the UK wealth market and some potential sales of parts of the international business. ‘You can see part of the UK business pushed into UK retail banking and parts of it up for sale. They could move into the exit squad.’
A spokeswoman for the bank said W&I’s strategy remained unchanged despite Horrell’s impending departure.
She added there are no plans to up the £500,000 threshold, saying: ‘Wealth & Investment Management continues to be a key area of growth within Barclays, and the number of initiatives and activities in the pipeline demonstrates the ongoing investment into the business to support its growth plans.
‘The integration of the business means that we can accelerate and further enhance the offering to high net worth clients,’ she added, citing the planned launch of a direct-to-consumer offering Wealth Direct as an example.