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The key hopes and fears of wealth management chiefs in 2014

by James Phillipps, Danielle Levy on Jan 13, 2014 at 14:21

Many industry observers were surprised by the relatively low levels of consolidation in the run up to and aftermath of the RDR. But Dart’s chief executive Whitehead expects this trend to gather pace in 2014 as the wealth management sector increasingly diverges between those offering more lighter touch model portfolio-type services and others offering more service intensive bespoke portfolio management.

‘We anticipate more consolidation resulting in more boutiques being set up who will differentiate on relationships and personal service,’ Whitehead said, adding that he also expects pressure on fees to continue, ‘to ensure that they are reasonable and that the service justifies them’.

For Whitehead, the real opportunities lie in ‘winning clients on the back of consolidation where clients are treated as commodities rather than as valued personal relationships’.

But while consolidation will throw up opportunities in terms of attracting disaffected clients, Dart Capital will not be getting involved in any M&A frenzy saying the firm’s key focus this year remains the ‘same as it has been for the last five years’.

‘Organic, balanced, sustainable growth in all aspects of the business.’

Raj Basra, Tacit Investment Management


For Tacit partner Basra, the main opportunity set will continue to be driven by the fallout from the RDR as businesses struggle to adapt to the regime and clients become dissatisfied with their existing wealth managers.

‘A lot of people are not quite sure what their operating model should be,’ Basra said. ‘Some have been quick to adapt, but others are struggling to understand what their service levels and charging structures should be.

‘We see opportunities there if you have a clear investment philosophy, a transparent charging structure and the performance is there. We don’t have the problem of legacy business and are clear on our proposition. A lot are not sure whether they should be wealth managers, IFAs or investment managers.’

Tacit’s unconstrained multi-asset approach will also be an advantage he believes, as those with more rigid benchmarks will have to ‘own a lot of assets that they don’t want to own and not be able to buy more of the things they do want’.

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