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Williams de Broë sees growth in the UK with new strategy

A staff reporter, 13 February 2005

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Williams de Broë, one of oldest stockbrokers in London, believes it is well placed to grow its UK private client business following a diffic...

Williams de Broë, one of oldest stockbrokers in London, believes it is well placed to grow its UK private client business following a difficult few years. The firm has adopted a new strategy to achieve this, designed to offer its clients a 'total wealth management' experience. "We see encouraging growth trends and believe we are well placed to take advantage of our name in the UK private client business," Richard Charnock, head of the private client business, told Private Client Management. Charnock joined the stockbroker earlier this year from Lloyds TSB where he managed its private banking operations. Since joining, he has hired three senior private client asset managers from his old firm and brought across Mark Stevens, also from Lloyds, to spearhead de Broë's marketing efforts. De Broë hopes Charnock's business acumen will help position the stockbroker as a private client business worthy of its name and its long history. The firm was struggling before Charnock's arrival, after a failed management buyout led by chairman John Miller in 2000 and the loss of a top private client team to Brewin Dolphin the year before. A major part of Charnock's approach to reviving the business is to adopt a holistic approach to wealth management. Part of this was to emphasise asset management; bringing in the fund management team from Lloyds was crucial to the strategy. De Broë is also currently in negotiations with a major UK commercial bank to provide exclusive onshore private banking facilities for its clients. "We hope to announce this tie-up soon," Stevens said. The London stockbroker has been a subsidiary of Banque Bruxelles Lambert since 1986, which itself is a subsidiary of the giant Dutch financial services company, ING Barings. "We operate pretty much exclusively independent to these organisations, but can take advantage of their worldwide network and extensive product offering when we need to," Charnock said. The stockbroker can also direct a client to the necessary trust and fiduciary expertise, and advise — or bring in outside advice — on alternative investments such as hedge funds and even fine wine. "We hope this comprehensive approach will increase the 'stickability' of our existing client base, even from generation to generation," Stevens said. De Broë has £650m of assets under management, with at least 75 per cent of this being private client money. The average portfolio is around £250,000. Stevens said that new money flows have been positive this year. "We are witnessing a dribble of migration away from the big names to the boutique providers, such as ourselves." The stockbroker has a strong regional presence with offices in London, Birmingham, Edinburgh and Leeds and is planning expansion, with the West Country and Wales being targets. New client referrals are split between existing client introductions, independent financial advisers and professional relationships through accountants, lawyers and other professionals. The firm's investment approach is based on a top-down model, looking at the international economy, the UK, then sectors and finally individual companies. It has a strong research reputation, with its analysis topping the AQ best house for accurate forecasting in relation to the FTSE 100 companies for the year to August. The firm beat competition from big names such as Merrill Lynch, UBS Warburg, Goldman Sachs, HSBC and Credit Suisse First Boston. De Broë has hired David Smith as its in-house economist to emphasise this top-down approach to investing. Smith is better known as the Sunday Times' economics editor, who advises the UK Treasury and Gordon Brown, chancellor of the exchequer. "Harnessing all of our in-house research expertise allows us to construct robust asset allocation policies, which are then in turn tailored to meet individual client needs and aims. Continuous reviews by our fund managers allow us to monitor portfolios and take advantage of market conditions," Stevens said. Clients have access to discretionary multi-manager funds, which de Broë monitors on a regular basis. "Our investment decisions will be made in the light of our close monitoring of the performance of the funds, and their managers, and on the basis of any changes in our views on world markets," Charnock said. Analysts remain on the fence when assessing the new-look de Broë. "It has a very good name in stockbroking, whether it can grow a private client business remains to be seen — Charnock and his team certainly have their work cut out for them," a London-based private banking analyst said. Charnock and Stevens are confident enough about the future that they are looking to recruit additional staff — preferably with a book of business — and have a number of active mandates with headhunters. "We're one of the few recruiting in this market," an upbeat Stevens said.

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