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new artisans of private wealth, and perhaps to discover the recipe of the ‘special sauce’ at the heart of their success. But what of the banks? Coutts & Co, which knows a thing or two about the needs of the wealthiest clients, has just revamped its own ultra-high-net worth private office offering. Its newly unveiled Coutts Family Office has a dedicated staff of 34, looking after 275 clients with AuM of £4 billion. Camilla Stowell, head of client coverage at the bank, says the move simply reflects an effort to ensure that clients continue to get the best from the bank. Moreover, she is keen to emphasise the benefits of being part of a larger organisation compared with the boutiques (‘we just have that breadth and that reach’) and talks up the firm’s use of open architecture (Coutts has partnered with BlackRock to cut costs). Coutts has been part of NatWest since 1920, but Stowell notes that it is not ‘an investment-bank-backed private bank’, and therefore is ‘not a distribution channel’. Indeed, with £4 billion in AuM, the Private Office is similar in scale to many boutiques.


Ross Elder Lincoln Private Investment Offi ce


“It’s about genuinely treating clients as individuals, building things for them,


having structure that’s properly aligned”


‘We’re actually perfectly placed in the middle because we’re a boutique within a bigger bank so get all the benefits of the bigger bank – as well as, frankly, the deeper pockets and the governance and the certainty.’ For now, there is room for firms of all shapes and sizes. But how long that lasts is open to question. ‘The very interesting feature of the wealth management industry is that it is very fragmented,’ says Eighteen48’s Julien Sevaux. He notes that


2019: Eighteen48 Partners co-founded by ex-Stanhope partners Julien Sevaux and Tarek AbuZayyad


2020: Sandaire merges into Cazenove Capital


Smith & Williamson merges with Tilney to form Tilney Smith & Williamson with AuM of £47 billion


even the industry’s most powerful entity, UBS, has a relatively small chunk of the market. Its global wealth management division has just 3.3 per cent of the $80 trillion of HNW wealth, as estimated by Morgan Stanley-Oliver Wyman. Yet if the rise of the boutiques named in these pages were to continue as some expect – privately, targets of a tenfold increase in AuM are discussed in some quarters – then the larger players would have little choice but to pay careful attention. Whether such growth is sustainable may rest on the boutiques’ ability to retain what has made them special. ‘The end client is aware that they’re investing with a group of individuals who really care because those individuals have taken the trouble to set their own firm up,’ says Nick Hornby, who co-founded another boutique, Cerno Capital, in 2006. ‘And it’s really important to these people that what they’re doing is a success.’ ‘Entrepreneurs love working with entrepreneurs,’ says Pinto. And they ‘tend to be very cautious when they deal with banks, because they know that they are a kind of prey in the eyes of the bank.’ He smiles. ‘We are entrepreneurs as they are, and it creates a kind of bond which is very hard to replicate when they deal with a big institution.’ For now, if the banks are losing any sleep, it is more likely because of an idea that the boutiques have been able to propagate, rather the growth of their AuMs. Still, it is a powerful one. ‘When you say you’re client- centric,’ asks one private wealth insider, ‘can you actually give some evidence of that? I mean,’ he chortles, ‘one can’t just say: “I have integrity”.’ S


Stonehage Fleming acquires Cavendish Asset Management, a London-based MFO with around £1 billion in AuM


2021: Stanhope Capital completes merger with FWM, parent of Forbes Family Trust, creating a $24 billion AuS independent, international advisory fi rm


ISTOCK


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