European Wealth is a UK-based investment boutique founded three years ago and which recently made a senior appointment (see here). This publication decided to find out more about this firm and what makes it “tick”. It spoke to co-founder John Morton.

European Wealth is a UK-based investment boutique founded three years ago and which recently made a senior appointment (see here). This publication decided to find out more about this firm and what makes it “tick”. It spoke to co-founder John Morton.

Can you give some background on what led up to the founding of your business and why you wanted to set it up? Can you say a bit about yourself and your main colleagues?

European Wealth was set up in 2010 with the intention of taking advantage of the turmoil that had hit the financial markets in 2009. The main objective of the business is to try and return to some of the old City values of giving clients within the wealth management industry a highly bespoke and personal service which provides common-sense financial planning and investment management solutions.

The parent company, European Wealth Management Group, has a very experienced Board made up of individuals with many years of City experience including George Robb (the founder chairman of Aberdeen), Kishore Gopaul (who ran Citi Bank in Africa) and Rod Gentry (former CEO of Ashcourt), who I first worked with when Ashcourt acquired the investment management arm of DMH, a firm of solicitors who I worked with in the late ‘80s when I was at Aberdeen.

What is the unique value proposition of your firm?

We believe that the old personal touch has gone from the middle market of the wealth management industry and this is providing us with a great opportunity. However, it is important that alongside the personal service we can provide added value through independent financial planning or an investment style that always takes into account client risk, which in many cases is more important than the reward. The business has been put together over the last three years to offer clients a wide range of services under the broad heading of wealth management.

How is the firm structured?

EWMG plc is our holding company under which we have our two independent, regulated companies - European Financial Planning (EFP) specialising in financial planning and European Investment Management (EIM) specialising in investment management.

Is the firm structured as a private partnership or some other model?

EWMG plc is 48.8 per cent owned by EW Group, an AIM-quoted investment company with the balance of the shares being owned by the founding shareholders including Courvoisier & Associés, a Swiss wealth management company.

What sort of clients do you serve? Where are they from? Do you segment in a particular way and how?

Our clients are almost always exclusively UK based but we do have a diverse range of clients within that ranging from institutions for whom we administer pension schemes to private individuals, trusts and pension schemes.

How do you reach new clients and build a pipeline of business?

Being a relatively new organisation, we have to rely on word of mouth and referrals from existing clients. As we are increasing our market presence, we can expect to start building further relationships with introducers. Some of the growth of European Wealth is also as a result of acquisitions and we would like to continue to take advantage of the market opportunities to build the business further through acquisitions, should the opportunity arise.

We use acquisitions not only to build the size of business but to also expand the range of services we offer to clients. Likewise we see making key hires as an additional means of increasing our assets under management.

You [recently] talked briefly about your use of cloud computing. Can you elaborate on how central technology is to your business model?

One of the great benefits of starting a business on a clean slate is that we have been able to take advantage of the significant benefits that have been available within our industry. One of which has been the evolution of cloud technology which has allowed us to provide access to our systems in our regional offices at a minimal cost.  We are in the enviable position of having a single IT platform for each of our regulated businesses.

 Do you outsource certain functions? Which ones if so?

The founding shareholders made a decision in the early days to do as much as possible in-house as we felt the use of leading edge technologies allowed us to do this in a highly effective manner whilst ensuring the maximum control on quality of service is delivered to clients.

Can you tell me how the Retail Distribution Review and other regulatory/industry trends have affected your business and moulded your strategy?

We were in the very fortunate position of being able to develop a client offering and set of procedures that embraced RDR before it actually arrived. It is part of our central thinking that RDR was only the start of the journey to an era of far greater transparency of charges and clarity over services offered. We fully embrace this trend and would not be surprised to see the Regulator further advance down this road.

Can you give me some views you have on the UK wealth management industry in general? Are there things that you say still need to be sorted out and can you give a few specific examples?

The wealth management industry will  undoubtedly continue to face changes over the coming years given the costs of operations in the industry are likely to increase at a time when price models are likely to continue coming under further competitive pressure.  I can see going forward that the industry will have to invest more in IT and can quite easily imagine that the next generation of clients will seek far greater  visibility on how their money is being managed and want to have further interaction with their advisors.

And finally, where would you like your business to be in a decade from now? Are there specific goals you have?

Recent moves in the wealth management industry have suggested that many of the established players are trying to move upmarket or restrict their services to certain types of clients.  I feel that we can take advantage of this trend in the market in being able to offer a high level bespoke service to what could perhaps be described as ‘medium’ net worth individuals.

I foresee changes in the industry over the next 18 months will present us with a number of great opportunities within the UK. However as the world develops, we will need to recognise that the UK marketplace for wealth management is a very competitive place and I would not be surprised to see European Wealth expand both in the UK and overseas markets in the future.