This publication talks to the CEO of Barclays wealth and investments arm about strategy at the group as it goes through a marketing campaign.

It may have been a while since Barclays’ name was plastered over advertising billboards as far as its wealth management brand was concerned, but the UK-headquartered lender has recently ramped up its marketing campaign. 

The three-month campaign (ending after mid-December this year) will build on the renewed momentum of a firm that has restructured and changed, Dena Brumpton, chief executive of Barclays’ wealth and investments arm, told this publication recently. Brumpton joined the bank two years ago, having previously worked at Citigroup for three decades. 

Her experience is being put to good use at a firm that has, over the past couple of years, spun off private banking arms in Hong Kong and Singapore, cut its old Africa business and refocused on domestic UK markets and certain select international operations. In that sense, Barclays has taken similar steps to other European and international banks that have shrunk booking centre numbers in recent years to focus on areas where they can achieve most profits and critical mass. The next few years will see if this move pays off.

The marketing campaign is part of a story around a firm that, having been through testing times, has a positive message, she said. “We are such a massive retail bank that we need to make people more aware that this [wealth business] is a service on the platform as well,” Brumpton said, speaking from the bank’s UK headquarters in Canary Wharf. 

“There’s huge growth in our market and you need to have a fully scalable platform with the broadest and deepest service offerings,” she said. 

Growth has continued:  the business has hired over 150 people this year, most recently with the appointment of Tim Tate as its new head of client and customer experience. (See associated story here.)

Barclays no longer reports discrete results for its wealth and investment management arm. The overall group logged a pre-tax profit of £3.448 billion ($4.56 billion) in the third quarter of the year, a 19 per cent rise on a year earlier, while the costs of offloading its Africa business caused an attributable loss for the period of £628 million, against a profit on the same basis of £1.524 billion a year ago.

Shareholders will hope that momentum at the wealth and investment side of the firm helps a broader recovery. The lender's share price has been under pressure during this year, lagging the rise in the FTSE 100 Index, of which Barclays is a member in that blue-chip benchmark. Ending on 30 December 2016 at just over 222 pence per share, the bank's share price now fetches around 185 pence. The stock currently has a consensus rating of Hold and an average price target of 217.28 pence per share, according to the Ledger Gazette website.

Full-service
Throughout some of the recent changes at Barclays, the firm has stuck to its belief that the Wealth & Investments business benefits from being grouped in the Barclays UK entity and being able to leverage off the digital capabilities and technological developments in that area.  Clients such as business owners also value the breadth of products available and the depth of expertise that a large wealth firm can provide, said Brumpton. 

About half of the Wealth & Investments clients at Barclays come via other parts of the bank, while the rest are brought in from outside, Brumpton continued. 

There isn’t a specific hard ratio for how many clients each wealth manager serves – the specific figure will depend on the type of client and the complexity of their requirements, she said. 

Ring-fencing 
Along with other top-tier UK banks, such as Lloyds Banking Group, HSBC and Royal Bank of Scotland, Barclays is “ring-fencing” retail, deposit-taking operations from the riskier, investment banking side under reforms enacted by the UK government and due to take effect as soon as next year, completing in 2019. (The idea is to reduce the need for future taxpayer bailouts, as in 2008.) An issue raised by this publication at a recent briefing on the matter by the Financial Conduct Authority, the UK regulator, is whether wealth management clients’ access to investment banking products might be squeezed. 

Barclays says clients will see little change to their service offerings from ring-fencing. As far as this lender is concerned, the process involves transferring the current Barclays UK division of Barclays Bank PLC into the new ring-fenced bank, which will offer everyday business and personal banking services in the UK to retail customers and smaller corporate business banking. Ring-fencing requires the “everyday” part of a bank to be split from more complex, wholesale and investment banking activity and from certain activities outside of the European Economic Area. 

As a result of the need to meet the requirements of the new ring-fencing rules, Barclays Private Bank & Overseas Services was formed alongside Wealth & Investments.

Barclays says that as part of supporting clients across the whole wealth continuum, the new structure enables clients to progress from the Wealth arm to the Private Bank if they require more bespoke products (including access to the Corporate and Investment Bank) and if their wealth increases.

What’s hot?
WealthBriefing asked Brumpton about a number of “hot” trends in the sector, such as the enthusiasm seen for what is called “impact investing” – putting money to work to achieve non-financial as well as financial returns – developments in artificial intelligence, and the threat of cyber-security. 

“Impact investing has got to be about a good investment that is also making an impact on society,” she said, pointing out that Barclays has launched a fund aimed at the impact investing area, pitched at all kinds of investors. Brumpton is strongly committed to the area – she is a member of an independent advisory group set up by the UK Government looking at impact investing issues. 

Artificial intelligence is an important technology development affecting banking and investment, she said, adding: “To me it’s about a search for relevance where so many things are available. This can be about filtering and providing people with relevant information that they want to hear about.”

As far as cyber-security is concerned, this is a “massive priority for us at Barclays”, she said. “Prevention is of utmost importance in putting a stop to this crime and we want to do everything we can to help our customers by providing information and guidance to keep their money safe from any attack,” she said. “With the number of customers going online rapidly rising the issue of fraud prevention has never been more important,” she added.