William Baker Baker, Brewin Dolphin’s Newcastle office head, is a fixture in the firm, having been with them for 30 years.
An employee of Brewin Dolphin for nearly his entire career, the British Army veteran invited Wealth Manager to its city centre offices to reflect on how both the company and the industry have evolved over the past three decades.
‘I joined in 1987 and if you look at a graph of equity progress in its entirety, there was a crash soon after I came on board,’ Baker Baker says.
‘The market lost 27% of its value in three days. However, if you look back at the entire timeline, those three days are barely a wobble in the grand scheme of things. So when people ask me about how I feel about the anniversary, I think it’s important to step back and look at it all in its entirety.’
Baker Baker certainly has a great deal of experience and has seen remarkable change over the course of his career. Originally based in Brewin Dolphin’s Teesside office, the Middlesbrough FC fan now ironically works just a stone’s throw away from St James’s Park, the ground of arch rivals Newcastle United. He heads up a team of more than 300 people in the Tyneside office and remarks his beginnings were very different from where he sits today.
‘If I think about how the business has changed, the business used to be involved primarily in dealing in execution-only trades.
‘In Teesside, we had Imperial Chemical Industries and British Steel just down the road and those companies both issued share options to their workers. So every year the employees would queue up and try and sell their shares through us.
‘When I started we were a classic stockbroker and nowadays you have very few people who just want to buy and sell shares. Instead, it is about a full wealth management service and looking after a family’s holistic finances. Back then we would send over a share certificate when the deal was done and that was it! Nowadays there is a much more in depth discussion about risk and what sort of achievements the client wants to pursue.’
The image of a wealth management firm like Brewin Dolphin dealing primarily with factory workers cashing in their options seems alien from how it operates today. Over time, management shifted the focus onto private client investment management and financial planning. In retrospect, the move was timely and triggered before many of the big industries left the North East forever.
But despite the loss of many of these former big employers, Baker Baker’s passion for the North East or the job has not diminished.
‘There is confidence in the North East economy,’ he says. ‘We are the only region that exports more than we import. I think the importance of good quality financial planning and advice is showing its value now more than ever.’
His ‘now more than ever’ observation, alludes to the uncertainty of Brexit impacting the North East, but he insists there is a considerable amount of entrepreneurialism in the region. And this is reflected in the changing client profiles.
‘I think there is a degree of caution over how Brexit will affect the North East, but there are positives. There was nervousness around what would happen to Nissan as it employs so many people in and around Sunderland. But we saw some confidence instilled there [by the government],’ he says.
‘If you went back to when I started, it was very much traditional old money whereas now the clients who are becoming clients for the first time are much more likely to be business owners and executives. A lot of marketing activities relate to those. We are [also] partners with the Institute of Directors, the local Chambers of Commerce and the Entrepreneurial Forum.’
Baker Baker says Brewin Dolphin has a varied client bank in the North East. A steady part of this includes charities and the Tyneside team has regularly taken part in charitable events with its clients over the years.
A fast growing flow of business is coming from agency work with IFAs.
‘Traditionally I don’t think we did a lot of agency business with IFAs, but now it is the fastest growing bit of the business,’ he says.
‘This year we will get somewhere around £50 million to £60 million in new funds. If you look back a few years we were only scratching the surface of a few million. A lot of IFAs are looking to outsource their investment management now.’
The Newcastle office provides the full range of services that Brewin Dolphin offers through investment management and financial planning, and Baker Baker says it is very important that his team has been afforded their own level of autonomy. Although the Tyneside team has access to the same briefings and research as the firm’s other regional hubs, when it comes to investments they are able to pull the trigger themselves.
In terms of investment performance, the Brewin Dolphin Balanced Portfolio* (sitting within its managed portfolio service) has returned 65.7% over five years to the end of March compared to the WMA Balanced index’s 59% rise over the same period.
‘The key thing about us and what I really do like is that we get all of the research, but at the end of the day the investment manager makes the final decision. They have the final responsibility,’ says Baker Baker.
He argues that this could become a competitive advantage over other firms
‘I think increasingly centralisation in other firms is something we are seeing. We still have that final call here.
‘However, the most important thing, over all of this and throughout my career, is making sure the client has great service. Even though I’m running the office, I still try and make time for clients. If I do not understand their concerns, how can I do my job properly?’
The Newcastle office has grown into one of the key hubs in Brewin Dolphin’s national network. Established as an important centre for IT support between Edinburgh and London, Baker Baker has made it a priority to hire financial planners for the office over the years to ensure clients’ financial goals and objectives are the key element of every process.
This personal interaction and listening to the client is what makes Baker Baker a proud traditionalist who is unconvinced that ‘robo-advice’ will ever be a massive threat to wealth management.
‘There is no doubt technology will play a larger part, especially in terms of reporting, as clients want to know more about their investments and access them more,’ he says.
‘That will continue. However, technology cannot fully replace the relationship a financial planner will have with a client. Clients put their trust in relationship managers and you cannot buy that trust with technology alone.’
With increased regulatory and compliance costs, the onus on getting the right talent for wealth management has never been more prominent.
Many private client firms based outside of the capital have complained that the best talent often heads to London, but Baker Baker points to his growing office of more than 300 staff with 4,000 clients as a sign that regional branches can still attract and retain good wealth management staff.
‘We like to recruit locally if we can,’ he says, predicting that over time the office will grow to have more financial planners than investment managers.
‘There is a temptation to go to London and some people will ask to transfer there, but people do migrate back,’ he says.
‘The North, once you have done London, is a wonderful place to live. We are blessed with some great universities up here and we make a point of keeping in touch with them and letting graduates know we are here and what we can offer them.’
Finally, as our meeting draws to a close, it feels it would be remiss of Wealth Manager to not ask about Baker Baker’s somewhat unusual surname and he graciously humours us. ‘It’s a long story,’ he laughs.
‘But here is the short version: once upon a time, several generations ago, a Miss Baker married a Mr Tower, but they kept the name Baker as a Christian name for their children. A few generations later, as coincidence would have it, a Miss Baker Tower married a Mr Baker and took his name. The name then became Baker Baker and has confounded ever since.’