DG: Private Banks aren’t known as hot beds of entrepreneurialism, how did that environment inspire or prevent you from starting your own business?
UB: I had known I wanted to start my own business since the mid 90s and in 1999 I almost made the leap. Thank goodness I did not make the move flippantly as I continued to see and experience a huge amount in the subsequent years that gave me a more rounded base to launch HP Wealth Management.
DG: So what was the trigger to starting HP Wealth Management?
UB: The sea of administration within the large organisation was already rising and combined with the practices in the market around mis-selling and product pushing led me to believe that there must be a better way to deal with wealthy clients.
Private bank vs independent asset manager
DG: What exactly is going wrong at the private banks in your eyes?
UB: They are under pressure to make revenues. All targets and metrics ultimately point to that because they have shareholders and, in many cases, a share price to uphold.
That simply isn’t in the interest of clients because the bank will try and make revenues by consistently selling products and structures, irrespective of the client’s attitude, understanding and risk appetite. I’m afraid that ‘milking the client’ is all too prevalent and it’s relentless – a sale always needs to take place. The pressure on the Relationship Manager is enormous.
DG: So who is your typical client and why are they better with you than at a private bank?
A Typical client is an Ultra High Net Worth Individual or a family. The UHNW is almost always unhappy in a private banking relationship. They may have had a liquidity event, such as selling a company. Often they explore whether to have a family office but when they meet us they realise that outsourcing the investment, administration and professional services makes far more sense. As we often say ‘we used to work for banks with clients, but now we work for clients with banks’. If a client understands this, he is sold on the concept of Independent Asset Managers.
In many cases the private bank has drastically underperformed in terms of service,may have over charged for their services and the clients have realised that the products that were sold were more often than not unsuitable.
DG: What’s your investment philosophy at HP Wealth Management?
Bear in mind we are led by capital preservation. Clients don’t use us to become rich, they come to us once that wealth has been made in their businesses. We are usually lead by discretionary mandates. We sit down with clients and really understand their needs and perspectives. The key in our minds is asset allocation – getting the asset and currency mix right for the clients’ risk profile. With a long-term perspective and a focus on wealth preservation. In today’s environment you cannot afford to think short term. You have to establish a long term goal and stay the course while adjusting your asset allocation tactically along the way. Everything else is for gamblers, which is not our philosophy!
DG: What are your plans for the business?
We have been going strong since 2009 and we want to continue that but world domination is simply not in our ethos. We might ultimately hit 20 staff in the next year or two. Beyond that we have no immediate plans and we always want to maintain our boutique style and size. Focusing on the Asian family and their needs is at the core of everything we do. With my partners we bring a huge amount of wealth management experience to the table, which is especially valuable for families who need a wide range of wealth services.