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Profile: how to step up from £5m in client funds to £50m

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Profile: how to step up from £5m in client funds to £50m

‘It was quite a change,’ says Sanlam UK investment manager Cynthia Bowring, reflecting on the challenges of taking over other wealth managers’ client books. ‘A woman under 30, when the previous managers were men aged over 55 or 60.’

She is now two years into making the £65 million client book – which she inherited when she moved down from the company’s Kirkby Lonsdale office to its London headquarters – her own.

Bowring describes the first 18 months as a ‘retention exercise’. Much of it was spent pounding the shoe leather, meeting up with the clients in a bid to win them over and stop them following the two wealth managers who previously looked after them out of the door and over to a rival firm.

Although hard work, it paid off, and Sanlam retained the majority of the assets, 67%, which was ahead of the firm’s target.

‘There was a bit of a handover, but it felt like I got a completely new book of clients. [The prior managers] didn’t want to give me too much information because they obviously wanted to take the clients with them,’ she says.

‘There has been a change, and clients are unsettled, and like with any changes, you need to explain what’s going on. I went out and met the clients and reassured them that they are still with Sanlam, which is an enormous company with the benefits of a huge research team.

‘You spend a lot of time driving out to see clients, but a lot say it is nice that you bother to come out of London to see them. It was being put in at the deep end, and it probably did take a year and a half to work through. Even when you’re seeing people in the office, you probably need a day to prepare for a meeting.’

Throughout the process, Bowring says the biggest challenge was not clients’ reaction to her age or gender, but explaining why she wanted to change how their portfolios were managed.

She says the previous managers had taken a very traditional approach, whereas she felt that being more global would be optimal and enhance diversification.

‘The hardest thing was when I wanted to change the investment strategy and bring in a more global approach. The previous managers were more UK-centric, and it needed an educational approach with the clients and their advisers,’ she says.

Bowring is certainly not one to shirk a challenge. After the second year of her degree – she studied economics and philosophy at Leeds University ('the philosophy side of the degree was because I wanted to try something new, and I liked the people side of economics') – she had the opportunity to take up an internship in Shanghai.

Intensive Mandarin lessons ensued, and she spent a summer there at a French business consultancy, working on a number of different projects with its clients,

‘I was out there for two months and worked with a couple of Australian electronics companies that were trying to enter the Chinese market. They were looking at competitors and existing products in the market and looking for suppliers,’ she recalls.

After returning to complete her degree, Bowring then spent a ‘fantastic’ six months working as an au pair in Paris, improving what she describes as her ‘coffee-shop French’.

On her return to the UK, she found a job with alternative asset consultancy Murano, a recent start-up at the time. Financial services was not a purely random career choice.

When she was 16, Bowring had done work experience at a local wealth management firm, Border Asset Management, which she enjoyed. Murano gave her exposure to a range of clients, from family offices to wealth firms.

She would get to know their asset allocation requirements and then see if any of the hedge fund or alternative Ucits funds that Murano was hired to market would be suitable to fulfil them.

Less than a year into the role, Bowring got a call from what had been Border AM, but had since become part of the Sanlam Private Wealth group via a 2011 acquisition by Principal Investment Management, part of Sanlam Private Wealth.

After her work experience, the firm's management had promised that it would call her if a position arose at the company. True to their word, they did.

After passing the interview, she moved back up north in January 2014.

‘I moved up to Kirkby Lonsdale, did my training, and I spent three and a half years there. It was a lovely team up there, and the Lake District is really beautiful. But in March 2017, I started getting itchy feet, and I started talking to them [Sanlam] about moving to London, and coincidentally, two wealth managers were leaving at the time.’

The move meant Bowring swapped a £5 million book in Cumbria for one more than 10 times the size in the capital. She says she also now deals with a greater variety of clients, including a £2 million book of small charities.

After working through the retention exercise, Bowring is now undergoing an overhaul of client portfolios. Although performance has been positive – the average balanced portfolio is up 0.88% over one year to the end of February, compared with the IA 40-85% Equity sector’s 0.01% and 28.6% versus 25.5% over three years – she believes it can be enhanced further by taking advantage of the three multi-asset best ideas funds that Sanlam Private Wealth launched in February.

The risk-graded IFSL Sanlam Cautious, Balanced and Growth funds, run by the firm’s chief investment officer Phil Smeaton, invest across direct equities, in-house funds, bonds, infrastructure and cash. They levy an annual management charge of 0.75%, with the ongoing charges figure capped at 0.79%.

Bowring says the key attractions of the unitised proposition are its cost, the level of control Sanlam has over the funds' underlying holdings and their utility in the offshore bond market.

While they are useful as a means of giving smaller clients exposure to Sanlam’s best ideas, she stresses that investors put into these funds – rather than a fully bespoke portfolio – should not feel they are being fobbed off with a commoditised product. Indeed, she views them as a core low-cost holding for many clients.

‘That’s the battle we’ll face. I can see their concerns, but the fact is the client is getting exposure to direct stocks, they still get access to us and the fees come down dramatically,’ she argues. Sanlam charges 1% all-in plus VAT, which is negotiable for larger clients, and 0.8% plus VAT for intermediated clients.

Since the multi-asset funds have launched, she has moved around £4 million of her clients’ assets and is now putting clients into them on an ongoing process, where appropriate.

She adds: ‘One of my projects over the next couple of weeks is to look at clients with offshore bonds. They can only hold collectives, so where we have to use third-party funds, the fees are higher and have less control over their positioning. 

‘With our multi-asset funds, we have absolute control over the holdings and full transparency on them, and the fees are lower. I’m proposing on a case now for someone who has £3-4 million which is held through offshore bonds.’

Smeaton is supported on the funds by the company’s army of analysts, who provide global coverage, including on equities in Asia, Europe and the US. The analysts, who operate on a sectoral basis, provide daily reports as needed – for example, around companies reporting results.

This feeds into a best ideas fund buy list, and Sanlam Private Wealth also operates a fund buy list. Portfolio managers are able to deviate from the house asset allocation view by 15% to enable tailoring and cater to clients’ specific needs, such as income or ethical requirements.

Bowring describes the firm’s current outlook as cautious, with the company favouring two thirds of its equity exposure in global stocks and one third in the UK. It also recently sold out of emerging markets due to dollar concerns, but will buy back in when these ease as she backs the region long-term.

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