With 270 years of experience under its belt, there is no doubt that Rathbones is a leading light amongst UK financial institutions. The UK wealth manager is listed on the London stock exchange with a market cap of £1.1 billion and is responsible for managing wealth of some £34 billion.
The Rathbone Private Office is targeted at the larger, sophisticated client segment whose needs are quite substantially more complex and wide ranging than clients with smaller portfolios. In addition to the discretionary asset management service that Rathbones is well known for, the Private Office has access to leading global advisory solutions and investment research, allowing clients to retain control of decision making with the final investment decision being theirs. They can also provide secured lending against portfolios, mortgages and a very well-resourced financial planning team to help clients manage their after-tax-returns. Pension advice along with trust solutions are also a core offering. In short, their service is designed to look after the most complex client needs. Recently appointed as Head of the Private Office team, Ian Dembinski is making quite a stir in the wealth management arena and so we were keen to track him down to explore exactly how Rathbones can help manage your wealth in a turbulent world. Previously the Head of Domestic Private Banking at Credit Suisse, Ian has 14 years’ experience in the Ultra High-Net Worth space and has given us an insight into Private Office’s wealth management philosophy.
How do you ensure your clients get the best objective advice?
Providing objective advice to the client is really the core of what we do. At Rathbones we are advisory and not product driven. We are not motivated by sales targets of a particular product or solution. We start our relationship by understanding what is suitable and appropriate for the client, and not what we want to sell. By getting to know the client well, we serve them well. In addition, we have the freedom to choose managers other than Rathbones if they are better placed to look after the client’s needs. That means we really do sit on the side of the client and are genuinely objective in our advice.
How should a client go about choosing a wealth manager?
Our Private Office team has access to a wide range of analytical tools that can help us to choose the best manager for a particular requirement. In addition, every day of the working week we have wealth managers presenting to us to review their performance as we invest in their funds inside our client portfolios. So we really do know who are the best managers in a particular market place and we are totally impartial about which managers are selected. The fee we charge is not dependent on the manager we use, the investment solution selected or the asset class that is being populated inside the portfolios. We are incentivized to make the right recommendations for the client based on their suitability and appropriateness.
With transparency being so high on the investors’ list these days how do you provide transparency over the entirety of a client’s wealth?
I think that’s a very important question and in the past clients who have lots of different managers were in a difficult position because they would get their reports in entirely different formats and methodologies. This made it very difficult for them to understand the totality of their wealth, the risks they are taking and the exposures they have in their portfolios. We have answered this problem by providing a state of the art consolidated reporting system that allows clients to see the entirety of their affairs across all the various pots of wealth and different managers in a singular easy to understand report.
How do you design investment portfolios to meet clients’ needs?
At the beginning of our relationship we ask the important questions of our client: What are your target returns? What is your attitude towards risk? What are your investment horizons? Are there any ethical investment restrictions that the client may have? The portfolios are designed using an in-depth questionnaire where the information helps us to construct an ideal asset allocation used to design a client’s portfolio. The client can change this portfolio as their circumstances change so it is not fixed but a dynamic process involving regular dialogue.
How do clients know what is a fair cost for wealth management services?
It’s understandable that costs are a key issue. However, if a client receives poor advice at the beginning of the wealth management relationship, or if the wrong asset allocation is selected or portfolios are incorrectly populated with investments, this will have a far more dramatic effect on the performance of the client’s affairs than the quantum of fees. I always say to the clients to focus on the architecture and the structure of their wealth first, and then we’ll have a look at the fees next. Having said that, Rathbones is in a position to analyze the fees of the underlying managers to ensure that the client is not over paying. One of the benefits we bring to the client is a deep understanding of what the market rate is for these services so the client gets a fair deal.
Obviously 2016 was a very turbulent year in political terms. How do you inform and educate clients on how to navigate these markets?
When you are navigating these markets you really need to have a robust insight into the influences on global assets. Rathbones has a dedicated in-house research team which allows us to make intelligent well informed judgments on the possible direction of UK and European markets. In addition, we also have access to third party research analysts that allows us to understand what’s happening in Asia, in the U.S and in Latin America. This is very important when we are trying to navigate volatile conditions.
Managing tax exposures is highly complex. How can you help to de-mystify these issues and manage potential tax liabilities?
Lots of our clients have existing relationships with legal and accounting advisers. We do not compete with them but work collaboratively with those third party advisers. We can design optimal investment solutions which reflect the client’s needs in order to manage the after tax returns of the client. For example, resident non-domicile clients have very particular needs and we can help select the correct investment structure based on outside counsel. For the UK tax payers, we have the full range of Enterprise Investment Schemes, Venture Capital Trusts and offshore bonds. We have a very well resourced trust team that can help to set up the optimal trust structures. So in a low yielding environment it is very important for our clients to think about the tax consequences of every single investment decision and we have a financial planning team that helps to do exactly that.