St. JameS’S Place KeePS FocuS on client in

Wealth ManageMent

St. JameS’S Place KeePS FocuS on client in Wealth management

The number of Ultra High Net Worth Individuals (UHNWIs) in Asia has now surpassed North America to make Asia the world’s leading wealth region. This is an estimated net worth of US$57 tril-lion, according to a report by the Boston Consulting Group entitled ‘Global Wealth 2015: Winning the Growth Game’.

For UK-based St. James’s Place Wealth Management, the expansion into Asia in 2014 offered the opportunity to tap into an exciting and dynamic region of the world. A FTSE 100 company, St. James’s Place has won awards from the City of London Wealth Management Awards for five consecutive years. The company has also won ‘Britain’s Most Admired Com-pany’ in its sector, through research con-ducted by Management Today as well as ‘Best Private Client Investment Manager’ at The Wealth Advisor Awards 2015.

The company’s success, according to St. James’s Place CEO Nigel Preston, is due to their focus on the client. “At the centre of everything we do is a focus on the client. We are very proud to be able to retain 95% of all clients.”

“We adopt a client-centric approach. We survey our clients annually and 97% of all those surveyed say that they would recommend us. It is all about doing well for our clients. Ultimately it pays off in these awards and our clients’ feedback,” added Brent Nicholson, Partner at St. James’s Place. Though most clients have experi-enced wealth management offered by banks, Nicholson pointed out that as banks offer services other than wealth management, they are not as focused on it. Still recovering from the 2008 banking crisis, they may have issues with capital and bad loans. “Fortunately we are an as-set management firm and not a bank. We are not hampered by those issues,” said Nicholson.

However, the breakthrough in Asia may not necessarily be smooth sailing for the company. While the potential is undeniable, the firm will first need to help Asian investors understand wealth man-agement products. Today, only a small percentage of investors are comfortable with buying them.

St. James’s Place relies on its busi-ness model which is based on the provi-sion of quality face-to-face advice, strong corporate values and a quality manage-ment team to maintain a successful and robust business in Asia.

tacKling aSia

According to Preston, the com-pany’s growth in Asia over the past two years has been exciting yet not without challenges. These range from unfamiliar markets and cultures to regulatory envi-ronments.

Culture may seem a minor issue when a company enters a new market, with issues like premises, competitors, market size and regulation ranking far higher up the list of priorities. However, Preston emphasised that one can never underestimate the importance of cultural insight. “You have to understand that mar-kets and opportunities are different. We are getting used to the fact that relation-ships and business do take longer to trans-act in Asia. In the same way, we have also identified many very experienced finan-cial advisors and wealth managers who already have established relationships with clients. This has helped us speed up the progress,” explained Preston.

The priority now is to grow steadily. However this does not mean hiring just to increase numbers at the expense of the strategy of longer-term sustainability which Preston is adamant about main-taining.

“Due to our size and our success we are able to identify the very best fund managers from the global world of in-vestment. We tend to work very hard on a selection process that is not based on solely one meeting. We get to know indi-viduals over a number of meetings,” he explained. “We are looking for someone that we think is competent and is a right fit.”

“We adopt a client-centric approach. We survey our

clients annually and 97% of all those surveyed say that

they would recommend us. It is all about doing well for our clients. Ultimately it pays off

in these awards and our clients’ feedback.”

Brent Nicholson. Partner at St. James’s Place Wealth Management

This comes down to how they view their careers and also the approach they take to advising clients, which he said is critical given that building something which is solid and meaningful takes time. Preston stressed the importance of the company ensuring their customers attain

their financial objectives. To achieve this, he wants St. James’s Place to bring in ad-visors or ‘Partners’ who are focused on developing a long-term career in private wealth management and not simply look-ing to push products.

“We are looking for people who are going to be with us for the foreseeable fu-ture, and not just for short-term gain. Our partners are rewarded for looking after their clients in the long-term. We ensure that they are valued, supported and ena-bled to do the very best job they can do with their clients. With the right fit and if the relationship with our Partners is val-ued, you will find that you will be able to retain both your clients and your Partners for the same period of time. For clients the continuity of the relationship with a St. James’s Place wealth manager is very important” said Preston.

Retaining talented StaFF

Inevitably, the key to growth is find-ing the right people. Retaining people is always a challenge in a market such as Asian wealth management. Preston has been focused on build-ing the company’s culture. He feels that it is simply not enough to put together a nice job description and benefits package

We are looking for people who are going to be with us for the

foreseeable future, and not just for short-term gain. Our partners

are rewarded for looking after their clients in the long-term.

We ensure that they are valued, supported and enabled to do the

very best job they can do with their clients.

Nigel PrestonChief Executive Officer - Singapore

to build a healthy company that retains its employees.

“Business is about people. You have to care about your organisation. You have to have empathy for your Partners. The top agenda for every meeting is welfare. I do a weekly report back to the U.K. The first line I have to answer is people’s is-sues ranging from one of the young lads that might have broken his ankle in foot-ball five-a-siding, or someone who might have lost a very close member of their family,” said Preston. Preston credits the positive compa-ny culture for the result of happy employ-ees and satisfied clients. The corporate

culture of St. James’s Place is one of ca-maraderie, a sense of pride, fairness, mu-tual respect, and trust. Preston revealed he has been inspired by the New Zealand All Blacks. “They have a principle called ‘sweeping the shed’, and it is something we encourage within St. James’s Place. At the end of every game, two of the All Blacks have to clean the changing room. It does not matter how successful they are or how good a game they had. Rank is something that has to be earned. It is the way you conduct yourself. Treat peo-ple the way you expect to be treated. We have also instilled the ‘sweep the shed’ principle, where we expect the Partners to respect everybody and treat them the

way you would treat yourself,” described Preston.

The best part of the job for Preston is the people, being able to develop the capabilities of employees, nurture their careers, and manage the performance of individuals. “Our Partners do not just transform their own lives. They are actu-ally building something long-term. They also do a better job for their clients which is very rewarding because I know our proposition is very strong. I believe that the right people, if they commit to doing the job in a real, 100% genuine, sincere way, the clients will get a very good, re-warding experience from working with St. James’s Place,” said Preston.

It is inevitable that some people will move on over time, he said, but St. James’s Place wants to find the right peo-ple to maintain a close atmosphere where Preston can be in touch with staff as well as clients regularly.

tRendS that Will re-define the induStRy Preston expects regulatory-driven change in Singapore to lead to a big shift in the landscape and opportunities for

wealth managers. However these chal-lenges give St. James’s Place reason to be optimistic.

The opportunity stems from being able to steer their business proposition to incorporate new regulatory requirements and emerging customer expectations in terms of how they get serviced.

“Singapore has a well regulated environment. As an organisation we like to work in a regulated environment. We like to know what the rules are. As far as our expansion in Asia is concerned, we only go where there is a good regulatory framework that makes sense to us. We are comfortable with the growing regula-tions.”

Although regulatory reforms in the Singaporean landscape will impact wealth managers to different degrees, St. James’s Place knows they need to respond with a more professional ap-proach to the selling and advisory pro-cesses. This will deepen the trust with their clients, gaining greater visibility and penetration in a market that has been dis-appointed by failed wealth management companies.

“It is damaging when you see ill-in-formed businesses trying to give a very quick return on people’s hard-earned money. We offer our clients medium to long-term investment returns. It takes a minimum of about 4-5 years before cli-ents can really see the value of the propo-sition working. If they want quick returns, there are various avenues they can ex-plore. However we do not encourage or support those sort of returns. In fairness we would be very clear with our client and disassociate ourselves from anything of the sort,” said Preston.

In order to counter the lack of trans-parency it is essential to have consumer education. Preston admits that although consumer awareness is growing, it is still necessary to educate clients about the importance of financial advice and under-standing the value proposition that the company offers.

Recently he met a 30 year-old young lady who talked to him about asset pres-ervation of her parents’ estate. “It is real-ly an exciting development for us. These are just the sort of people that we want to be working with. People are aware of dif-ferent sorts of vehicles you can choose to achieve your investment objectives, but there is a lot of confusion about exactly which is the right one. A wider choice may not necessarily mean they are making the right decisions,” observed Preston.

technology haS itS Place

Preston also noted that technology is both the biggest trend and challenge for industry players. Wealth management solely through the use of technology is not the answer. “I think one of the chal-

lenges we always have is the speed of technology and development which is ex-tremely rapid. Singapore’s appetite for fi-nancial technology is strong. Everybody’s talking about ‘robo-advisors’ and all the different ways in which you can access information and make decisions. I have been doing this job for over 25 years. I have to stress that it is not a computer, or a programme that will gain commitment from an individual to make a decision on their financial well-being. It is the rela-tionship that you have built with a good advisor that you trust, who has been with you for several years and supports you to make the hard decision on something. So financial technology is a big issue at the moment, but it’s far from I believe, the solution,” commented Preston.

However, he affirmed that St. James’s Place wealth managers do lever-age technology to meet clients’ expecta-tions on performance, insights and trans-parency of portfolio, through the use of analytics and business intelligence.

Business intelligence software can capture financial and client data and of-fer predictive modelling that helps the ad-visor determine the best product from a world of complex options, targeted to the client. The right product gets presented to the right client, at the right time. Put-ting those capabilities on top of a mobile

platform gives wealth managers the abil-ity to make decisions on the go, while cli-ents are on the go. Nicholson provided an example of a recent client meeting to discuss how to achieve the client’s objectives; “We had a real discussion about his needs. We worked out some figures. Instantaneous-ly with my laptop I was able to literally key in the figures, press a button and actual-ly come out with a computer-generated amount of money that he needs to set aside each month in order to obtain the right figure.”

“Technology is most definitely a help. However it cannot be used on its own. You have to have the human interac-tion with face-to-face contact. To get the communication right with clients there has to be a perfect understanding be-tween the client and the advisor with the right communication,” added Nicholson.

FutuRe talent PiPeline

According to Preston, St. James’s Place’s growth strategy for Asia depends on finding, training and hiring more ed-ucated individuals who can learn the market and help grow the business. Yet

finding enough skilled and experienced financial advisers to live up to custom-er expectations continues to be a chal-lenge. Target recruits need to be able to generate new leads and understand how to meet client needs in a consistent way. This requires strong technical knowledge and market experience. Given these bar-riers to growth, St. James’s Place is mov-ing toward an alternative solution which is setting up its own academy, probably in 2017.

“We will be selecting the very best individuals who have strong determina-tion and discipline. They might not come from a financial wealth management background. We will train them on how to be a proper wealth manager. We have been doing this in the U.K. since 2006 and have been incredibly successful. We

have three or four academy offices in the U.K, where we have selected the very best people with the right values to grow with us. In order to nurture them, we get them to learn and understand exactly how to do the job in the right way. This is like an apprenticeship. They will learn how to do the job with the very best seasoned prac-titioners.”

This is also a way to try to engender more loyalty, as management can look to train staff to perform the role required. “They will invest with us as well with their time, effort and appetite for learning. The academy will have no more than 10-12 in-dividuals. We will work very closely with them, hone them and ensure that they understand the entire set of principles about being a long-term wealth manager. ” concluded Preston.