Part of Schroders, Benchmark Capital explains how it works with IFAs and other wealth professionals. With changes such as last July's Consumer Duty, advisors have had a lot on their plate.

When advisors want to start their own wealth businesses, the daunting task of getting a firm off the ground is less onerous if there’s an experienced organisation with a friendly hand on the shoulder.

In the UK, such a business proposition, so its managers say, comes from Benchmark Capital. The firm, which was launched in 1993, then established itself as an independent financial network in 2003, and eventually partnered with London-listed Schroders in 2018. (Schroders is now the sole owner of Benchmark.) The business has £20 billion ($25.9 billion) of assets under administration and it powers about 190 firms. 

While some advisors might consider breaking out of big banks, and others might seek a route to retirement, firms such as Benchmark are important for providing direction and resources, Ed Dymott (pictured), chief executive of Benchmark, told WealthBriefing recently at Schroders' offices in the City. 

“We provide wraparound services to support a planner who wants to go it alone,” he said. “We enable you to drive a business forward.”

“I see the breakaway trend as one that will continue to grow in the UK,” Dymott continued. 

The supply of financial planners in the UK is static at best and, because of forces such as intergenerational wealth transfer, demand continues to rise. “The market is still fragmented and still dominated by the smaller practices. The opportunity is there for larger practices to take more market share,” Dymott said. He has been in the role since January this year; prior to this, he was managing director, wealth, from February 2021 to the start of this year. He also holds several non-executive directorships.

Revenue model
“We take a share of the advisor’s revenue (where we regulate them) and charge for any solutions the advisor wants to adopt. Whilst many of our competitors may make more of their revenue in one solution – usually the product – we are focused on ensuring we have individually competitive parts,” Dymott said. 

Benchmark is part of the way in which Schroders can cover the whole wealth management spectrum, from the mass-affluent/HNW section – via Schroders Personal Wealth (Schroders’ joint venture with Lloyds Banking Group) – all the way up to Sandaire, the multi-family offices which Schroders acquired in 2020 through its Cazenove Capital deal, adding to its UHNW capability.

An area of continued focus is how these different parts of the Schroders organisation – with a total AuM of around £110 billion – collaborate, Dymott said. 

In fact, given the nature of the different brands and identities of the group, the investing public may not fully appreciate the size and scale of what Schroders does, he said. 

In the B2B space of helping advisors get started, Benchmark supports firms, for example, prepare for regulatory approval – an increasingly demanding task with new rules such as the Consumer Duty (July 2023) coming into play.

“We have definitely seen an increasing number of advisors struggle with the weight of regulation and, as a result, have increasingly wanted to turn to firms like Benchmark to support them. On Consumer Duty we help to do a lot of the heavy lifting in terms of some of the implementation and we are seeing an increasing number of directly authorised firms wanting to switch to become regulated by us,” he said. 

Benchmark also operates in a market buffeted by consolidation on one hand and breakaways on the other. 

“We are a professional services industry, so I think we are going to always be in a cycle of consolidation, fragmentation and start up. This is no different to other professional services industries. However, what I do see now is further consolidation into 'centres of influence’ where advisors are increasingly building around larger groups – whether they are large advice practices, technology platforms or regulatory hosts,” Dymott said. 

WealthBriefing asked Dymott how it measures the efficiency of Benchmark’s teams. 

“One area we really look at is the productivity metrics for the advisor to really focus on taking out friction from the advice process. This year we are trying to save an advisor at least one hour per client per year – so for an average advisor they will save 120 hours of time this year or around 20 days of effort,” he responded.