What brings a firm to the broad lands of Wiltshire? Mark Nayler meets the men behind Quilter, who are establishing an outpost within the shadow of Salisbury’s spire
SALISBURY IS FAMOUS for its cathedral and being the home of the late Edward Heath, but not so much for its wealth management capacity. That doesn’t mean there isn’t local wealth which needs to be managed — the broad lands surrounding the scooped valleys and picturesque hills of the Wiltshire-Dorset border are chequered with large estates, and Salisbury is a fine intermediary spot between London and Bristol. Its potential has only recently been realised, but it has been seized by Quilter, a firm with ₤7.8 billion of funds under management which recently expanded there.
Under the auspices of Quilter’s head of Onshore Offices, David Loudon, Salisbury (opened in April 2010) and Edinburgh (opened in January this year) are the most recent stages in Quilter’s gradual regional expansion: it now has offices in twelve locations including established financial hubs such as Liverpool and Manchester. ‘It was never about scale for scale’s sake,’ says CEO Martin Baines. ‘It’s about delivering the right service to the client, to properly scale the business.’ Managing director Stephen Vakil backs this up, saying that ‘it would be fine going on a recruitment and acquisition binge, but if you don’t get the right people, you end up destroying value.’
The attention the firm gives to placing the right investment managers in front of clients was instrumental to the expansion into Salisbury. ‘There was a core of really good people there,’ says Baines. ‘Salisbury is an important regional hub in the South of England and, since the office opened last year, the number of clients that we serve from the area has grown considerably. We have a focus on Portsmouth, Southampton, Bournemouth, towards Basingstoke and some miles to the west and north including prosperous towns such as Sherborne.’
Edinburgh is an interesting choice too. According to recent research from MDRC, a management consulting firm and adviser on wealth management strategy, there was a significant reduction in the number of HNWs based in Scotland and the North after 2008, with 70 per cent now residing in London and the South East. The reasons for the exodus are not difficult to understand, as MDRC’s managing director Richard Williams says: ‘A surprising number of HNWs had an enormous amount of their portfolio invested in the Royal Bank of Scotland, so when it crashed, thousands of individuals went from being HNWs to not being HNWs.’
The resulting downsized population of HNWs might make building a client base more difficult than normal. Keren Grant, managing director of Edinburgh Wealth Management, also draws attention to the dominance of old boy networks in the private client sector and how hard outsiders find them to break into: ‘It’s often said that Edinburgh’s a village, and it’s more about who you know here than what you are.’
As Baines says, with regard to Edinburgh: ‘The rationale behind the opening was simple — to provide IFAs and investors in the East of Scotland with more efficient access to our bespoke discretionary investment management services. We already have a successful office in Glasgow and are now able to provide a comprehensive service across the whole of Scotland.’
The duo at the helm of the operation complement each other well. Baines started life at KPMG, before moving to the Gerrard Group and then Quilter in 1994. Vakil is polished and personable and made his name pioneering centralised processes and model portfolios at Foster and Braithwaite. Between the two of them, they cater to all personal tastes: Baines to fishing enthusiasts, Vakil to jazz fans.
One of their key differentiators, says Vakil, is the emphasis they put on maintaining personal relationships with their clients: ‘It’s absolutely essential. The internet is great for immediate information, so if you want to see what your portfolio is worth at half four in the morning, you can and that’s great.’ The diversity of their clients’ requirements, he says, can only be properly understood once they’ve met: ‘Whatever they want to invest for — school fees, second home, philanthropy increasingly — you only get that flavour, that colour, once it’s been discussed with them’.
At a recent dinner with a client who had been with Quilter for twenty years, Baines asked, ‘Why are you still with us?’ The response was short but telling: ‘Because I trust you.’
Vakil and Baines are eager to draw attention to two further differentiators that should ensure Quilter stays ahead of the competition. First, unlike many firms, they do not split the roles of investment manager and relationship manager: ‘The result of that is that the client meets the actual person that is responsible for all aspects of their account,’ says Vakil.
Secondly, the firm uses its own in-house investment management software. The system can assess performance and risk of portfolios and calculate capital gains tax on assets, among many other (much more technical) things. As Baines says, with obvious pride, ‘It takes real attention to detail to build your own system.’ Quilter developed its business to the point where investment managers can focus on their clients, not on poring over spreadsheets.