This publication caught up with RBC's wealth management team recently to find out how the bank's strategy is taking shape.

As goes a famous line from the old TV show, The A-Team: “I love it when a plan comes together.” And over at the wealth management arm of Royal Bank of Canada in the UK, they seem to be in the mood to fire up a cigar.

Earlier in November, RBC Wealth Management’s UK business appointed Ben Taylor as head of its newly-minted wealth transfer and retirees segment, aimed at working with people planning for retirement and setting up estates and structures for their descendants. (Taylor joined RBC in 2012 as a relationship manager and used to work for HSBC.) Separately, in September, RBC WM appointed John Younger as managing director, sales and relationship management, responsible for the business owners and entrepreneurs client segment team. RBC Wealth Management also recently appointed Stuart Mauger as director of the sales and relationship management team within its multi-family office segment. That role was a new one; Mauger is based in Guernsey.

And in one of the most colourful changes affecting RBC and its segment offerings, last November the Toronto-listed banking group completed its acquisition of City National, a California-based bank with a long list of Hollywood clients, propelling the Canadian parent up the pecking order of firms able to serve those from the entertainment business. 

These are busy times. Tony Johnson, who was made head of sales and relationship management at RBC Wealth Management over a year ago, joined segment heads and other colleagues at his firm’s Riverbank House offices in London's City financial district to discuss progress with WealthBriefing. It was hard to miss a buzz of optimism and forward movement.

“We are implementing a sustainable client coverage model to keep us in good shape for future years,” Johnson said. One of the advantages of these segments, he said, is they allow managers to talk to clients “in their own language". “We want to build expertise and insight into the like-minded buying behaviours within these segments.”

These are heady times for the Canadian bank, and it appears that results are starting to bear fruit, even when the one-off impact of the City National deal is stripped out. In August, RBC said its wealth arm reported a 36 per cent surge in net income to C$388 million ($300 million) at the end of its third quarter. (City National contributed C$82 million to net income.) There were benefits from the firm’s efficiency management activities.

Segment heads
Johnson (also interviewed by this publication here) was flanked by Ross Jennings, managing director, UK; Mark Hassett, MD, corporate executives in the wealth manager’s British Isles business; Sandy Swinton, MD for sports, media and entertainment, and Younger. (Not present at the meeting was Michael Reed, who is MD heading up RBC’s multi-family offices segment.)

The segmental approach is part of a drive by RBC, its managers say, to offer a highly specialised and professional form of wealth management, which is necessary given the bank does not have a high street presence in the UK. Instead, it is a business that requires its managers to network, to work with centres of influence such as lawyers, accountants and other intermediaries.

As one of the most recent joiners, Younger (business owners and entrepreneurs) kicked off by pointing out that his background marks him out as “unconventional” – he started at RBC Capital Markets in 1992, moving to a variety of roles, including a stint inside the corridors of power at the Bank of England, before hearing the RBC call in 2016 and rejoining the firm. Much of his banking life has been spent on the trading floor, originating solutions for clients, a background he says stands him and his new area in good stead.

“This is often about origination...about bringing forward sophisticated market solutions,” he said. Business owners often require help with credit, financing and development of their companies – a private banker who also gets the corporate financing and investment banking side of the deal makes sense. And his time at the Bank of England – coinciding with a period when the BoE was wrestling with a post-crisis financial world – means he brings an understanding to RBC of what policymakers think. This is, to say the least, a useful commodity.
 

Entertainers, sports stars and other clients 
Swinton, of the sports, media and entertainment business, has been at RBC since 2010, having previously worked at Barclays Private Bank. His banking experience goes back to 1981, when he started at James Capel & Co. His segment has the potential to be very broad and has six managers, but is looking to add between one and three people over the next few years.

“The opportunity for us here is that competition is extremely fragmented,” he said, going on to note that RBC enjoys strong, and growing, relationships with intermediaries who represent people working in these sectors. There are, it should be noted, other banks operating in the sports, media and entertainment space, such as Coutts and Investec’s private bank. Swinton says RBC’s purchase 18 months ago of City National is a game changer, though, as it added a business with over 200 managers focusing solely on serving people in this sector. It is a major shift. 

“There are opportunities we are on at the moment that would not have come without this business we have now in the US,” Swinton said. “It’s a winning package.”

RBC’s approach allows it to handle issues such as how a musician can use a back catalogue of music, or how sponsorship by other entities can work, or how to finance particular events and handle lumpy cashflow. RBC’s branding and associations reflect this desire to take a smart approach, Swinton said, citing the firm’s work with the British Film Institute.

Corporates
Mark Hassett stressed a “collegiate culture” at RBC Wealth Management as important for his corporate executives segment; clients are able to draw on guidance from RMs from across the expertise of the bank. For example, this was the case when the Brexit vote happened and clients were asking about how they could be affected.

The "collegial” nature of the wealth management part of RBC - as evidenced by how managers are paid (50 per cent of the reward coming from performance and the other half from behaviour) - was also stressed by Swinton, who said that the bank discouraged RMs - except in particular cases - from treating clients as personal property. He has seen, he said, a “real willingness” by RMs to pass on certain types of client to other colleagues more suited to catering to them.

All in all, RBC Wealth Management in the UK has found more momentum since its parent firm chose to focus on certain markets and prune its operations in areas seen as below critical mass. The segmentation approach by client type, rather than a focus on simple metrics such as assets or income, continues, it seems, to gain ground as a way of running a wealth business. The RBC plan is not yet all in place, but from this vantage point, a good deal of it is indeed “coming together”.