Strategy

UK Private Bank Brown Shipley Puts Faith in Recruitment

Tom Burroughes, Deputy Editor, London, 20 August 2008

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However tempting it might be for a financial institution to cut or freeze recruitment when economic conditions turn tough, venerable UK private bank Brown Shipley reckons that recruiting top-class graduates is essential for its own long-term growth.

However tempting it might be for a financial institution to cut or freeze recruitment when economic conditions turn tough, venerable

UK private bank Brown Shipley reckons that recruiting top-class graduates is essential for its own long-term growth.

An occasional complaint in the private banking industry is about a shortage of people with financial know-how and approachable personal skills – such attributes often do not sit easily together. A young derivatives genius may struggle to deal with a businessman who wants to plan to pay for school fees or retirement, for example. But Peter Collier, marketing strategy director at Brown Shipley, says finding such people able to encompass all necessary qualities will pay off in the future.

“For a large number of graduates who are drawn to the City, they are not even going to look at private banking as they will see the glamour and the glory of the investment banks,” he told WealthBriefing in a recent interview.

But clearly Brown Shipley has had no trouble getting interest from graduates. Mr Collier said the bank has seen great interest to fill its graduate entry places. “We are getting about 300 applications for each vacancy and the quality is very high. Our entry requirements are as high as those of any of the big banks,” Mr Collier said at his firm’s offices at the heart of

London’s City financial district. Last year, the bank took on five  graduates, so with 300 applications per slot, that means sifting through 1,500 applications – a tough process.

“There is a huge skills gap out there. If you recruit someone who is say, 40 years old, it is harder to change their ways,” he said.

Brown Shipley does not expect the recruitment drive to pay dividends for a few years but longer term, the returns should be worth it.

He has plenty of evidence on his side that recruitment and retention of top-quality talent remains a bugbear for the wealth management industry, which has – up until recently – been overshadowed by the supposedly greater excitement and glamour of working in fields such as mergers or big share offerings.

In March this year, PricewaterhouseCoopers warned that a talent shortage could derail growth in the sector. But in the wake of the credit crunch and huge write-downs for investment banks, suddenly private banking does not look such a staid career choice.

Brown Shipley has itself been through a radical change. Founded in 1810, the bank was acquired in the early 1990s by KBL (

Luxembourg), part of Belgian-based KBC Banking Group. In the late 1990s, the UK bank was told to buy complementary businesses, which it did with acquisitions including investment management, financial services and stockbrokerage.

“This was quite a sea-change in management from the old school to a more modern, contemporary outlook. For the next five years [after 2002] we concentrated on our core activities of private banking and sold off non-core activities,” Mr Collier said. Brown Shipley had grown a wide range of business operations over the decades that did not fit with our “core-focus” strategy for private banking, including businesses such as a travel agency” Mr Collier said. “By early 2007, we were a pure-bred British private bank,” he said.

“We have got a very traditional client base – a mix of entrepreneurs who sold their businesses and retired, and families with inherited wealth, plus charities and trustees,” he continued.

The bank has been busily adding to its business and where necessary, recruiting from rivals. Recent developments at the bank include the hiring of several advisors from Deutsche Tilney. Among the hires were Gordon Campbell and David Craig. Meanwhile, Brown Shipley's fund management arm Solus has rejigged its investment team line-up following Peter Botham's recent appointment as chief investment officer, which happened after the bank purchased the investment boutique, Bollin Asset Management.

Brown Shipley retains some traditionalist features – it is not greatly enthusiastic about alternative sectors such as hedge funds, for example. Mr Collier said the area of so-called alternative investments remains one that holds out promise, but he cautioned: “There is the whole area of structured products, hedge funds, alternative investments, and we do offer these to our clients but have in the past been a bit sceptical about them - they have a place, but they have a small place for us.”

As for further expansion plans – the firm has recently added to its regional presence with an office in Birmingham – Mr Collier said Brown Shipley had some further ground to make up but much of its necessary goals had been met.

“Our feeling has been that we have been a bit lightweight in some of the wealth locations in the
UK, such as the Midlands and
Scotland but recently we have opened offices in
Birmingham and
Edinburgh in addition to having an established presence in
London,
Manchester and
Leeds.”

Brown Shipley does not pitch itself among those banks serving the very richest: to be a client of Brown Shipley, in rough terms clients need to show about a minimum of £250,000. And as one of the oldest such private banks, it is also very much a “pure-play” operator, as it has spun off a good deal of peripheral activities outside the “core” of private banking to focus on essentials. At one stage the bank even ran a travel agency business, now sold off.

In the 198 years since it was founded, this bank has survived depressions, wars and economic booms. At a time of financial uncertainty, Mr Collier and his colleagues must hope such a robust track record continues to bring in clients and encourage existing ones to stay on board.

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