Choosing between prospective wealth manager can be a nuanced process, but these handy tips will help you zero in on the factors that matter most.
Andrew Butler–Cassar, Head of Private Office at Investec Wealth & Investment, explains the firm’s rapid ascent in the UK and the importance of a local wealth management presence.
Investec started in the early 1970s in South Africa with just four or five people and now we’re a multinational organisation with offices around the world and more than 7,000 employees. It wasn’t really until the late 1980s that we really started to put a footprint out here in the UK, but today we have 15 offices.
In the UK, we brought together two boutiques, Rensburg Sheppards and Williams de Broё under a new brand, Investec Wealth & Investment. The two firms had complementary exclusive and overlapping centres of excellence. This has led to a geographical footprint that covers most of the UK, so that’s London, Birmingham, Leeds, Liverpool, Cheltenham, Belfast, Manchester, Sheffield, Exeter, Bath, Guildford and Reigate; while in Scotland we have offices in Edinburgh and Glasgow and a Guernsey office in the Channel Islands. Most of the big urban centres are well represented and so for clients looking for local delivery we’ve got an office that is local for virtually everybody.
The fact that your relationship manager is also the person that makes your investment decisions is important to our clients. Every client has a dedicated investment manager who has ultimate responsibility for their relationship and the management of their portfolio. Clients like knowing that the person they’ve known for a long time is in control of the investment decisions and advice – that it’s not a faceless central policy unit that doesn’t know them. Our recent client satisfaction survey actually said that a dedicated investment manager, a trusted adviser and consistent investment performance were the three things that they valued most from Investec Wealth & Investment.
I think the fact that we can offer a full suite of services to clients is also attractive. They have comfort in knowing we are independent when it comes to financial planning, but that we also offer some in-house services such as banking, investment management and custody. Importantly, I believe that we are the right kind of size. We manage £27bn in assets in the UK, so we are large enough to give clients comfort around the necessary infrastructure and resources that modern investment management requires these days, but we’ve still retained that local touch.
We’ve also spent a lot of money on our investment research capabilities. We have 20 dedicated analysts to provide detailed and independent analysis of economies, markets and companies. Twenty independent researchers is actually a substantial resource, compared to some of our peer group.
We use a risk-profiling tool as a starting point with clients, but then we focus a lot on conversations and testing the answers given to make sure they are legitimate. We then have five risk categories and three objectives, which gives you a matrix of possibilities for strategic asset allocation. From where the client comes out in that matrix we know – through a lot of back-testing and observation – the bandwidths we should be playing in for different asset classes, based on their attitude to volatility and risk, and their profile and objectives. That’s purely strategic and then you have tactical asset allocations around that.
We believe investment managers need to have lassitude because we think clients want to know that they’re not being completely model-driven and that the investment manager can have a view based on what the individual client is trying to achieve. We’ve always been successful because we’ve tried to ensure that we understand the client, rather than trying to make something fit to the client.
Advisers have a conversation with the client and they agree the boundaries; if you play within them, then you’re managing the client’s attitude to risk and their capacity for loss as well. Clearly, we’re also assessing this on a regular basis. We have a system that monitors each portfolio on a daily basis against a set of criteria and flags up any potential issues that need to be dealt with. Then, on a rolling 12-month basis we do a KYC review for managed clients.
I can’t generalise, but clearly the industry is going through a lot of change. What we are noticing very much is that clients who are coming to us from the more traditional private banks believe Investec is a breath of fresh air. One of our strap lines is “Out of the Ordinary” and we generally try to live up to that; Investec is very much seen as a challenger organisation. Because we’ve been young and nimble and newer to the market, we’ve had to come at things differently.
The average tenure of a client with us is 14 years. Clients trust us to work with them and the generations, and they get comfort that we spend time looking after them and their wider family. It is important that we get to know them and they get to know us, because life is always changing.
In our latest client satisfaction survey, we asked clients if they had referred friends or family to Investec and a third said they had. Our clients have seen our growth and yet no dilution in service standards, so they are happy to say “You should get on board, this is really great” – which is a very comforting thing to us. They also complimented us on the way we communicate with clients.
Investec has always held values and culture out as being one of the most important parts of the business – and we’ve done that well in advance of it being a fashionable thing to say and do in the financial services sector. Our new employees are quite surprised about the number of interviews they have to go through in the selection process. We do all this because before we decide on taking somebody into our business we need to make sure they fit culturally with us. If you get that bit right the rest follows.
About Andrew Butler-Cassar:
Andrew has day to day responsibility for the implementation of the Private Office service at Investec. He believes it is important to remain client focused and therefore continues to manage portfolios for individuals in a variety of different tax structures and for individuals who require offshore capabilities.