Small-cap stockbroker Daniel Stewart plans to launch a discretionary wealth management service for clients with a net worth of more than £100,000.
Traditionally an institutionally focused broker, Daniel Stewart launched a private client advisory service last year under the stewardship of Mike Garnett. The company is now keen to build up its asset management capabilities, including a wealth management offering.
At present the firm’s advisory business is supplemented with an execution-only service for private clients, which includes trading in equity, fixed income, contracts for difference (CFDs) and spread betting, alongside assistance with self-invested personal pensions (Sipps).
However, Daniel Stewart’s chief executive Peter Shea is keen to build a comprehensive service for private clients.
He said: ‘We have been institutionally focused but in the last year we have decided that we would like to establish as a private client broker. It’s an area on which we are focusing and it will include a discretionary service, which is the direction that we are taking.’
Shea said one of the reasons the firm has so far been unable to offer its private clients a discretionary service is because it needs to comply with Financial Services Authority guidelines on IT requirements.
He said: ‘We are not quite ready to offer that across the board at the moment but it’s our intention. We have some IT issues as the functional requirements for private clients are different to institutional business.’
The discretionary business will not limit itself to the super-rich as it is does not want to price itself out of the lower segment of the market. ‘Certainly we will give consideration to people in the £100,000 area,’ Shea said.
He is scheduled to step back from his chief executive role at Daniel Stewart to take up an executive chairman role at the firm.
The broker has hired City veteran and former Hichens Harrison chief executive Adam Wilson as a replacement, who will be tasked with returning the loss-making business to profit.
The company announced a pre-tax loss of £0.6 million in the 12 months to the end of September after the small-cap sector in which it specialises was hit particularly hard by the financial crisis.
In a statement accompanying his appointment on Monday, Wilson said one of his primary targets was ‘to build a strong asset management business’.
Shea said this may include the launch of a number of retail funds at a later date.