On the face of it, Helena Bakunowicz and Richard Arris are an unlikely duo.
One is a young woman with a penchant for travelling and fine dining, the other an older gentleman into his classic cars and shooting.
But after an hour in the company of the former Brewin Dolphin pair, it is clear that these best of friends make a formidable partnership. It is also evident that they do not view their friendship as unusual.
‘I would say it’s the opposite – our core values are very similar, as people and in a professional context,’ says Bakunowicz.
‘We’re not twins – we don’t look the same, certainly – but that’s also a real plus, because an element to the difference in our age means you can actually professionally capture and cover a large market. It’s nice to have different perspectives from different people who have different life experiences. Clients really value that diversity.’
Set up formally in November 2017 by Bakunowicz under the Raymond James umbrella, The Investment Boutique has already enjoyed success, gathering £80 million in assets under management (AUM) within 10 months, with another £30 million in the pipeline.
While she is unable to disclose figures yet, Bakunowicz says the firm is already profitable, having turned a profit in its first quarter.
Part of the reason for its success is the personalised service and bespoke investment approach, but two other things have also helped the firm stand out – its location, and of course, the name.
‘It seems bizarre that it wasn’t taken because it’s such a simple and clear name,’ says Bakunowicz.
She feels that in terms of brand recognition, it’s important that from a client’s viewpoint a name does what it says on the tin – something that is not always clear from the names of some wealth firms.
The ‘boutique’ part, Bakunowicz adds, also helps differentiate the business. ‘Boutique is often described as a style of investing, and that’s very much how we want to be viewed. It’s not necessarily mass-market or generic; it’s bespoke, it’s small-scale, it’s individual and personalised.’
The firm’s location, in leafy Surrey on the way to Gatwick and only a short train ride away from central London, has also helped it capture wealth. Oddly enough, a place for clients to park their cars has also put the Oxted-based business above competitors.
‘If you’re not an Oxted local you won’t understand the significance of this, but we also offer car parking, which makes us incredibly popular with our six car parking spaces, as it’s a very competitive car parking environment here,’ jokes Bakunowicz.
Having established the business in November, she was officially joined in her new venture by Arris, who left Brewin Dolphin after 35 years at the firm and 21 years in charge of its Reigate office, in February.
The pair were colleagues at Brewin’s Reigate office, which Bakunowicz had joined in 2010 and remained until her departure last year.
Neither would be drawn into the reasons for their exits. Arris simply says: ‘[Brewin Dolphin] had 35 years of my life. Pastures anew beckoned.’
Those who leave big wealth managers to join or set up a boutique often say larger companies are taking a more model-driven approach, with investment professionals increasingly taking on more clients.
In contrast, spending more time with clients and having more freedom to invest appears to be a big drawcard for investment managers, as does the challenge of growing their own business.
A central part of The Investment Boutique is the idea that each investment manager will have no more than a few dozen clients.
It is why the business already has three investment managers in addition to Bakunowicz and Arris. They are looking to hire a fourth.
Bakunowicz says: ‘Our aspiration is to have no more than a few dozen clients each – that’s the level of relationship we want to provide to our clients.
‘That’s why we’re already looking to hire a financial planner and another CF30 on the investment side. Because if you have many hundreds of clients, as is typical in the industry, with the best will in the world you might only see them once a year, which we expect would be the very minimum. That’s not what we’re in the market to do.’
From a practical viewpoint, Arris adds that the more personalised approach to a client’s portfolio can also reap better rewards.
He says: ‘By juggling around their portfolios only slightly, within their risk parameters, we can reduce their tax liabilities sometimes even by more than our charges, but that’s the difference between bespoke and a more model-based approach.’
The Investment Boutique only offers bespoke portfolios, mainly made up of direct securities and some funds when required. This is something that the pair says helps drive down fees.
They charge a flat fee of 1%, which goes down to 0.4% for portfolios of over £5 million. The firm has around 50 clients at the moment and a minimum portfolio size of £1.5 million.
Bakunowicz says: ‘We try to be very analytical of any collectives we use to make sure it’s not all similar things, or indeed if it’s something where we like it, we can just buy it directly rather than gain exposure to something via a fund. We like to do that extra level of due diligence.
‘Naturally some portfolios might have more collectives than others based on an individual’s mandate. Because our minimum portfolio size is £1.5 million, there’s not necessarily the same necessity to include so many collectives purely for diversification purposes. They all have to have a standalone reason for being included.’
The pair say they have ‘relished’ the onset of Mifid II and the Financial Conduct Authority's (FCA) stance on fee transparency.
The Investment Boutique does offer a combination of commission and fees if clients want it, but Bakunowicz says there has been ‘very little take up’, with clients preferring flat fees. She believes the traditional stockbroking model used by wealth managers will soon be a thing of the past.
She says: ‘I think it’s really great that the FCA is able to encourage people to move towards a management fee-type model, because that very directly aligns your interest with the client in terms of the performance.
‘There’s no incentive for anybody to conduct trades, because there’s no commission associated with that – it’s just part of the natural day-to-day investment management of the portfolio, so we’ve opted for a fee-only structure, because we think it’s the future.’
Bakunowicz and Arris are the only two shareholders in the business, with both holding 50% each.
The duo have big plans for the business. On course to beat their target of £100 million AUM in their first year, they plan to be in the top 10 of Raymond James branches in terms of assets by the end of 2018. Bakunowicz says the ultimate goal is to be the leading Raymond James branch ‘as soon as possible’.
The business’ current size is made all the more impressive by the fact that, as Arris points out, they have not done any marketing yet, or gone out to chase new business – all the clients they have at the moment have come their way naturally.
The firm has a comprehensive business plan for the next 10 years, which includes new managers joining as it aims to reach over £1 billion in AUM.
‘You can see we are only just getting going,’ Arris says, before Bakunowicz adds: ‘We’re both ambitious people and have a desire to push the business forward as much as possible. The expectation is that we’ll expand and thrive, and hopefully you’ll be able to see that when you come back in a year’s time!’