Charities continue to be an important client segment for wealth managers. In the first in this two-part feature, senior executives at the wealth and investment management division of Barclays outline what their firm is doing to help UK-based charities.

Charities continue to be an important client segment for wealth managers. In the first in this two-part feature, senior executives at the wealth and investment management division of Barclays outline what their firm is doing to help UK-based charities in these straitened economic times.

Like several of its competitors, Barclays has been aggressively expanding in the UK regions in recent years, chasing the significant and growing wealth held outside the capital by being closer to its clients. What is less well known, however, is how the bank is working to get closer to its charities clients – wherever they might be based.

Charities are sometimes seen as a bolt-on client segment and firms will regularly announce that a new appointee will be serving private clients, smaller institutions and charities. In contrast, Barclays is firmly of the view that the complex needs of charities calls for them to be served by specialists and it has been pulling out the stops to ensure that this is the case for as many of its charities clients as possible, large swathes of which are of course based outside of the capital.

Sasha Wiggins took up the role of national head of charities at the wealth and investment management division of Barclays in July 2011 and at the start of 2012 began to oversee an overhaul of the bank’s charities proposition which aims to deliver a much more clearly defined proposition which was consistent across all of its offices. Now, all of Barclays’ offices are covered by charity experts in offices within the same region, to complement the big teams specialising in charities which are based in London and Glasgow.

Dedication, specialisation

“We absolutely believe that being as dedicated to the sector as possible is the better way for us to manage charities for the pure reason that their needs are different and complex, and in the current economic environment even more so, so we should make sure that we have specialists who have an understanding of what all those issues are,” said Wiggins. “So, where possible, we will always believe in having sole bankers focusing on charities. In some of our regional offices that’s not always possible, but what we’re doing is trying to make it as focused as possible.” As such, everybody on the charities team in London focuses on charities 100 per cent of the time, and at least 60 per cent of Barclays’ total charity team spends 100 per cent of their time on charities clients.

That’s not to say however that each charity is served by only one banker, although it was historically the case that Barclays’ charities clients would each be looked after by a single portfolio manager (this is also the prevalent model at many other firms). Now Barclays’ creates a team around each of the charities that it serves, which consists of a charity advisor, a portfolio manager and an administration assistant.

When asked if this is a parallel to the trend towards team banking seen in the wider industry, Wiggins agrees that this approach does reduce so-called “key man risk”, but the team approach is actually more about differentiation at Barclays. Maintaining the necessary regularity of contact charities need while also delivering maximised investment returns is an impossible task for one person and so Barclays has separated these two responsibility areas out.

A packed diary

“When you have charities clients you tend to need to have to meet them at least quarterly at their trustee meetings and – we believe – more often than that. So if you’re looking after money and adhering to that then you’re out of the office quite a lot, and we believe that that impacts on portfolio performance,” she explained.

With investment management taken care of by the portfolio manager, the charity advisor is therefore free to meet much more regularly with charities, and being “pro-active about contact” is a key part of Barclays’ strategy for this segment.

“We will typically be speaking to our charities clients at least every six to eight weeks at the very minimum,” said Wiggins (this is in addition to the quarterly trustee meeting cycle most charities will have established).  “We want to make sure we have someone in front of the screen managing money for our charity clients every minute that the market is open, and then the charity advisor will be very aware of the portfolio management decisions that are going on but they will be focusing much more on trying to get close to the charity operationally.” The aim of the advisors getting a handle on a charity’s day-to-day running is to better understand what their needs are and how they are changing  in order “to be one step ahead of those changes rather than reactively responding to them,” she said.

Getting a good operational understanding of a charity is essential since - as with other types of client - there is as much variation intra-segment as there is inter-segment. Charities of course exist to fund a multitude of different good causes and vary from the highly locally-focused to those with global reach; it should also be remembered that while some charitable organisations are perpetually endowed some have a set lifespan and are mandated to spend down all their funds. Barclays itself currently serves 800 charities which, in Wiggins’ words “vary hugely in size”. It also has “a very diverse sector exposure” which encompasses virtually every type of charity in the UK, she said.