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27 September 2019

Is bigger better?

Wealth managers and private investors alike can’t have failed to notice recent merger and acquisition activity in the industry, with Tilney’s £625m acquisition of Smith & Williamson the latest in a series of moves in the sector. Such major acquisitions are not uncommon in today’s rapidly-changing regulatory environment.
 
With the pace of regulatory change there has been a greater focus on processes. In the Financial Times last month, a senior wealth manager suggested that it was becoming more common for smaller firms to merge with larger organisations that can better cope with increasing compliance needs.
 
The more robust regulatory environment is being created ultimately with the client in mind. But does a larger organisation, targeting scale and efficiency, provide a better environment to support the relationship between the client and the investment manager?
 
David Loudon, Joint Chief Executive at independent investment management and stockbroking firm Redmayne Bentley, said: “Clients and investment managers alike may feel some uncertainty when the firm with which they have been for many years is snapped up by a larger company. Often, they will keep the same investment manager initially at least, but the service they receive may be restricted as the new bosses gradually implement controls.
 
“We are aware that as part of this consolidation, a lot of the industry is moving away from truly bespoke services, driving the adoption of model portfolios and strict buy lists for the investment managers. We appreciate this is being done to improve scalability and improve profit margins, but we believe this is to the detriment of the client. We continue to allow our investment managers the autonomy to utilise their experience to construct portfolios tailored to their clients’ specific needs. 
 
“We continue to believe that putting clients’ needs before profit margins and scalability will serve our clients, investment managers and ultimately the firm well going forward as it sets us apart from an industry increasingly focussed on scalability.”
 
Client relationships are a cornerstone of the service provided by Redmayne Bentley. David said: “Time and time again, investment managers tell us to provide the best possible service it is crucial to have the ability to develop and maintain long-lasting relationships. This enables them to be aware of the needs of their client and their circumstances, which change over time.
 
“And having a detailed knowledge of our clients’ capacity and appetite for risk of course supports us to fulfil our regulatory obligations. Our investment managers will only ever build and manage portfolios that are right for the individual, taking into account a variety of other factors such as ethical considerations.
 
“We always welcome discussions with talented investment management professionals who share our commitment to client service. A smaller, more agile firm ensures a close connection to clients and understanding of their needs, which might be just what both the investment manager and client are looking for.”
 
Ends
 
You can follow us on Twitter www.twitter.com/redmaynebentley
 
www.redmayne.co.uk
 
Redmayne Bentley offers a full range of services, from investment management services suitable for different life stages, through to traditional stockbroking, dealing with advice and tax efficient investments.
 
Redmayne Bentley’s service has repeatedly been recognised with quality service and administration awards, most recently Best Full Service Stockbroker, Best Stockbroker for Customer Service, Best Self Select ISA and overall Stockbroker of the Year at the Investors Chronicle / Financial Times Investment and Wealth Management Awards 2018.
 
 
 
 
 
Is bigger better?
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