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Profile: Julius Baer's regional team on their UK takeover plans

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Profile: Julius Baer's regional team on their UK takeover plans

The industry has been quietly observing Julius Baer International’s ambitious regional push over the past 18 months.

At a time when other wealth management groups are closing or consolidating regional offices, the Swiss wealth manager has been on an aggressive hiring spree and has so far established itself in four cities outside of London.

‘I keep pinching myself about how well we have done in the past 18 months: four offices, teams covering the majority of the key regional cities, and fantastic success in how we have embedded ourselves in the organisation,’ reflects Calum Brewster, the private bank’s head of UK regional offices.

‘And the reception we have had in the professional market place has been fantastic. It has cemented the historic relationships we have had in our local communities and has opened the doors further,’ adds Martin Cuthbert (below), who is a team head responsible for the North East and Midlands.

‘It is interesting that people we have worked with historically have let us get a deeper understanding of their clients, business and what they are trying to achieve. Those partnerships are strengthening and strengthening,' he adds.

Over the past year and a half, Julius Baer has opened offices in Manchester, Leeds and Edinburgh, complementing the existing London hub. It plans to formally launch an office in Belfast soon, although a team has been in place there for some time. There are currently 19 relationship managers operating across the regions and 40 staff in total.

Brewster stresses there are no hard and fast targets in place and the emphasis remains on organic growth at the right pace.

‘What is refreshing is the approach that David Durlacher [Julius Baer International’s chief executive] has taken in London and the support from head office. We have looked at this in a different way – we are growing based on the need of the market and the clients’ request.

‘Other organisations might say, “we will open six offices and recruit x number of people”. I have no objective in relation to recruitment. My objective is to be an aspirational brand for clients and talent in the market,’ he explains.

Although the team is unable to provide an indication of the assets under management they have attracted since launching into the regions due to company policy, they are keen to tell me that Julius Baer attracted double the amount of new accounts in the UK last year in comparison with the previous two years combined.

‘We were a major contributor to that in the regions. We have also been pleased that we have seen success across all of our hires in each of the major cities,’ Brewster adds.

What has been particularly refreshing, Cuthbert says, has been the ability of the regional offices to attract clients who are completely new to both the teams and the business, referred on by professional advisers.

This means it hasn’t simply been a case of new hires bringing over their previous client books.

In particular, the regional teams have achieved success in the entrepreneur market, which Gordon Scott, who is responsible for the regional business in Scotland, the North West and Northern Ireland, believes is ‘significantly underserved’ by wealth managers.

‘It sounds quite old-fashioned, but despite Mifid II, compliance and regulated controls, we believe firmly that clients should have access to the building blocks of a wealth management strategy that is bespoke to them, not a one-size-fits-all, because it is scalable for us as a business,’ he adds.

While Julius Baer has an investment minimum of CHF3 million (£2.3 million) in place in London, the management team took the decision to lower this to £1 million in the regions. Some competitors may still view this level as overly punchy, but the trio say that it has not acted as too much of a barrier to attracting new clients.

‘The minimums we have talked about very loosely have become irrelevant because the clients that are choosing to engage with us are significantly more wealthy than the numbers we have quoted,’ Brewster notes.

Scott (below) believes the company’s regional success so far can be attributed to the personalised service it offers to clients. ‘Clients are now alive to the fact that they are not restricted to a one-size-fits-all solution,’ he says.

Brewster echoes this view, saying: ‘I have worked for a number of large banks in the past, which are obsessed with segmentation. I have a very different view on segmenting because I have never met a client who thinks they fit in the same box that the bank would define them as being in.

‘Clients want you to understand them. It is about the relationship first and foremost. We don’t segment at entry point,’ Brewster says.

With this in mind, he feels like he has returned to his roots at Julius Baer, given the company’s focus on building personal relationships with the clients and designing the mandates from there. He jokes that he has used his grey matter much more over the past 18 months at Julius Baer than he has for a long time.

‘For the first time ever, my own money is run by Julius Baer. Always, in the past, I ran my own money. That is powerful to say in the market: I believe in this so much I invest in it myself,’ he adds.

In the UK, Julius Baer offers three types of discretionary mandate: ‘globally diversified’, which offers exposure to bonds, equities and alternatives; UK-focused multi-asset; and asset class specific mandates, which can be used as building blocks for a client’s portfolio.

The Swiss private bank also offers three types of advisory portfolios. Firstly, ‘advice basic’, for informed investors who wish to create their own investment strategy and make their own investment decisions, but also draw on investment advice when required.

Secondly, ‘advice premium’, which offers continuous risk monitoring and advice. Finally, it offers ‘advice advanced’, which provides clients with the highest level of service, access to an investment adviser and ‘tailor-made investment recommendations’.

Across these mandates, clients are able to invest in funds or direct securities. In the UK, close to 45% of the business is in discretionary mandates, with the remainder in advisory.

In addition, financial planning is available, covering wealth structuring, succession planning, retirement, taxation and philanthropy. 

Julius Baer’s discretionary Global Premium Balanced portfolio, which invests in direct securities, has returned 11% on an annualised basis over the three years to end of March, which compares to 9.7% by the composite benchmark. Julius Baer’s Global Multi-Manager Balanced portfolio achieved a 9.9% annualised return over the same period.

‘We are getting a huge share of wallet because we are able to customise the offering to clients in a different way,’ Brewster says.

He adds that the team’s efforts to build relationships with professional advisers, including corporate lawyers, corporate finance teams and private equity houses, has also paid off.

‘As a wealth manager or a private bank, traditionally, you are invited to a request for proposal (RFP). Our aspiration is that we don’t have to do that because we have engaged at an earlier stage and worked with corporate advisers to already be the wealth manager for any event that has been thought about.

‘We are already experiencing that, as we are not being invited to the RFP process because we have already been appointed the wealth manager,’ Brewster says.

What is particularly notable about the timing of Julius Baer’s regional push is that it has coincided with preparations for the UK’s exit from the European Union. In contrast, this uncertainty has caused other businesses to hold fire on their expansion plans until clarity is provided.

‘For our business model, it means no change whatsoever,’ Scott says. ‘The Swiss bank is looking to help clients irrespective of a hard, soft or no Brexit at all.’

Looking ahead, Scott hints that areas like the South West and Cambridge could be on the radar when it comes to further regional expansion. However, he says there are no immediate plans to open additional offices and much will depend on finding the right talent.

Meanwhile, Brewster is keen to stress that growth will remain organic and driven by opportunities as and when they present themselves. ‘We will grow at a pace that is right for the market, therefore we are not disappointing shareholders or the market,’ he says.

‘We own the business plan, strategy and growth.

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