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Six wealth start-up stars share their lessons on going solo

We asked five wealth managers what the best advice they were given a their fledgling firms branched out alone.

Regulation and the rising costs of operating a business made many in the industry argue that it would be the end for boutiques.

The sheer number of mergers and acquisitions in the investment management sector also resulted in concerns that the industry would be ruled by a few giants and consolidation would only accelerate, reducing consumer choice.

But boutiques have defied the naysayers and are thriving, differentiating themselves by the services they offer and the clients they are targeting. 

So, for those yet to launch a business, but who are dreaming of being their own boss one day, we have compiled some tips for you. We asked the founders of six boutiques what the best advice they received was when they set up their business and what, if anything, they would do differently if they could go back in time.

From wishing they had just done it sooner to learning to be realistic about what you can achieve and when, here is what these boutique bosses learnt along the way.

 

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Regulation and the rising costs of operating a business made many in the industry argue that it would be the end for boutiques.

The sheer number of mergers and acquisitions in the investment management sector also resulted in concerns that the industry would be ruled by a few giants and consolidation would only accelerate, reducing consumer choice.

But boutiques have defied the naysayers and are thriving, differentiating themselves by the services they offer and the clients they are targeting. 

So, for those yet to launch a business, but who are dreaming of being their own boss one day, we have compiled some tips for you. We asked the founders of six boutiques what the best advice they received was when they set up their business and what, if anything, they would do differently if they could go back in time.

From wishing they had just done it sooner to learning to be realistic about what you can achieve and when, here is what these boutique bosses learnt along the way.

 

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Please sign in or register to comment. It is free to register and only takes a minute or two.

What was the best piece of advice you got about starting up?

John Crowley, CEO, Hawksmoor Investment Management

I could have said 'focus on delivering the highest quality of service and the best possible investment performance to clients that you can and the business’s success will follow', but I knew that already.

So I guess it was probably 'stick at it as you grind up to the first £100 million funds under management. The next £100 million comes much more easily'.

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Jon Bowes, CEO, Lockhart Capital Management

There are two pieces of advice which we are incredibly grateful for. The first is to make sure that you get the very best legal and accounting advice. I think that it is too easy just to get excited and focused on 'doing business' without enough preparation and implementation of the best structure for your firm.

It is definitely worth paying independent advisers to help you with this as they have the experience and can explain the consequences of so many areas that you just don’t think of.

The second piece of advice I would offer is that when you put your business plan and budgets together for the next five years, halve your expected income and double your expected costs. By the time we had our final plan it looked so very different to the first iteration. This focused our minds on controlling the costs to ensure that the set up period is sustainable.

In our case our costs have indeed been greater than we thought at first, however, we have exceeded our income budgets significantly. We have therefore been able to adjust our growth plans accordingly form a position of financial strength.

 

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Charlie Nicholls, managing partner, Equality Capital

Cut out the noise. You will have many different people: family, friends, business associates telling you how to launch your company and what they like or don't like about it.

Remember these are anecdotal opinions and do not necessarily represent the market you are trying to attract. Certainly, take feedback on board, but don't give too much credence to one opinion. You know your business best.

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Laurence Boyle, chief investment officer, Maia Asset Management

We set up Maia Asset Management with a clear business proposition: to work closely and build strategic partnerships with financial advisers to manage their clients’ portfolios on a discretionary basis, while offering exceptional service and constant and consistent communication.

With more regulatory pressures on financial advisers, our peers agreed with our vision that an increasing number of financial advisers would be striking up strategic partnerships with boutique discretionary fund managers to free up their time to focus on a core area of work: financial planning.

In the early days, this reinforcement of our business plan was an encouraging confidence boost.

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Andy Steel, CEO, James Hambro & Partners

Jamie Hambro has always said that growth is important, but it's an outcome, not a primary target. It’s a natural result of delivering good service, strong performance and providing something people need and have difficulty finding.

So over the past eight years we’ve looked at what the wealth management boutiques and the big houses do well and tried to capture that. We’ve also looked at where they struggle and tried to avoid those drawbacks. All the time the focus has been on clients.

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David Pegler, principal, Brighton Capital

There are the usual golden nuggets such as 'surrounding yourself with the right team', 'break it down to bite-sized chunks', 'earn while you build' and the all-important 'enjoy the journey'.

However, the one that I believe helped Brighton Capital Management lift off was 'define your service around what your clients are telling you they need'.

We were told that we were good at financial planning and investment management, but what about broadening our understanding to our clients’ businesses and families, up and down a generation?

Then ensuring we had a good working knowledge of the 'entrepreneur cycle' and holistic lifestyle planning. This additional breadth allowed our modest start-up wealth management business morph into a proper fully integrated wealth adviser able to compete with the likes of the most respected wealth management and family office boutique businesses in the UK.

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What would you have done differently if you could go back in time?

Andy Steel

Barely a week goes by when I haven't wished I’d done something differently – it comes with the territory of trying new ventures, investing in people and taking risk. When you get things wrong you have to recognise it quickly, act decisively and not dwell on it.

So I’d rather focus on what I need to do differently in future. Like most chief executives of growing organisations, I need to learn to let go of some things and trust the talented people around me to pick them up. I’m getting better at that, but it doesn’t come easily!

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John Crowley

Recruit people more quickly who can do the key roles better than you, and then delegate to them better and more quickly.

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Charlie Nicholls

Keep things simple and don't try and do too much at once. With any new start-up, it is very exciting and you will have grand ideas about what you can do with your offering.

For your launch, focus on the core functionality and market. Hopefully, you will be running this start-up for many years and you can introduce new products and functionality further down the line, but if you try to do it all at the start, your message can get confused.'

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David Pegler

It would have certainly been less stressful if we had been more realistic about timescales. There is a tendency to overestimate what you can do in the short term and then underestimate what is possible in the long term.

You must accept that we live in a busy world and people often have to deal with their own 'stuff' so sometimes moving a relationship to the next level takes time. Just accept that and keep doing what you believe is right.

Try not to get desperate and offer too many special deals or take on customers just to meet your targets – it has a way of coming back to bite you.’

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Jon Bowes

We should have done this five years earlier!

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