Barclays Wealth has made a
dramatic impact on the UK wealth market, offering a combined one
bank solution to private clients in a traditionally fractured
market. New UK and Ireland head, David Semaya, discusses his ideas
on comprehensive wealth management and the bank’s plans to increase
relationship manager numbers.
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While most private banks are rushing to extend their
businesses in Asia and clawing for Asian experts to bolster their
ranks, David Semaya is doing it differently. The fluent Japanese
speaker, who spent five years living and working in Japan, the
world’s second-largest wealth market, took over as head of UK and
Ireland at Barclays Wealth in December.
Semaya joined the wealth division
from Barclays Global Investors (BGI) where he had been chief
executive for BGI Europe, the Middle East, Africa and Asia (ex.
Japan) since 2006.
Semaya says the UK has
traditionally had a highly-fractured private wealth market where
high net worth individuals (HNWI) might have asset management
relationships with four to five different banks or asset managers
depending on their requirements.
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By GlobalData‘Comprehensive wealth
management’
As he sees it, Barclays Wealth
offers comprehensive wealth management, giving HNWI the opportunity
to have their core wealth management services, from banking to
investment products and asset management, in one place.
“We believe we can continue to grow
our market share, given our proposition and the investment we’re
making,” Semaya says.
Asked where he sees wealth
management growth coming from in the UK, Semaya says there is a
tremendous opportunity to convert corporate clients into private
banking ones.
“One in five people in the UK have
a Barclays account… I see an opportunity to leverage the broader
group, especially from the business bank, we have seen good
success,” he says.
In the year to December 2009,
Barclays Wealth had assets under management of £50.7bn ($76bn),
making it the largest asset manager in the UK. Semaya will not
disclose Barclays’ most up-to-date asset totals, but says net new
money flows have been “positive and strong”.
Momentum
shift?
The Barclays wealth leader senses a
momentum shift in the first quarter of 2010 as UK clients start to
talk about investment ideas, rather than being fearful and sitting
tight to ride out the uncertainty.
“There is a lot of uncertainty with
a change in central government, with potential changes in taxation
and with economic uncertainties in Europe. We measure the business
in many ways, but one is activity – for example, the meetings and
conversations with clients – and that is up significantly this
year,” he says.
Barclays’ strong emphasis on
exposing private clients to its broad range of Barclays
Capital-generated investment products has raised questions about a
product-push mentality in its wealth division.
“It has to start with client needs.
We have a very large stable of offerings, but not everything is
appropriate, clients are multi-banked, but I think having the
quality conversation [is where it starts],” Semaya says. “There is
a lot we can offer, given our resources. The emphasis for us is to
offer a bespoke service offering discussion with clients, but
having the global resources of the bank to provide them,” he
adds.
IT investments
Barclays’ parent bank has started
on a major IT infrastructure upgrade to better equip its staff as
well as prepare for the complex post-crisis regulatory
environment.
The three-year £350m global IT
upgrade will streamline and automate Barclays’ process for taking
on new clients, as well as creating a bespoke state-of-the-art
platform for bankers. The platform will pull together all the tools
needed to understand client accounts, from investments to breaking
news.
Separate to this IT investment,
Barclays is making a concerted push to boost staffing levels. It
currently has less than 300 relationship managers in UK and Ireland
and would like to add 100 to 110 over the next two to three
years.
Probed on further mergers and
acquisition targets for Barclays Wealth, Semaya makes it clear
organic growth remains its focus.
“Barclays has, through Barclays
Capital until the Lehman acquisition, been all about organic
growth. BGI, which was an acquisition from Wells Fargo, was all
about organic growth,” says Semaya. “We recognise that this is a
marathon, not a sprint.”
Ignore home country
bias
Looking ahead, Semaya’s message to
clients is clear: ignore home country bias and diversify
globally.
“The developed world will grow at a
lower rate going forward. The reality is that having all your
investments in the UK, some in UK equities, is not safe. Inflation
will be with us for a long period of time and to beat inflation you
need to be diversified globally,” he says.
“From UK clients we have a lot of interest in where there are
business opportunities in a number of these emerging markets. How
can I increase my exposure to Chinese equities, even through direct
ownership is typical of questions being asked.”
