More and more wealth managers are striking out alone, but few have the bottle to attempt this in their 20s.
One investment manager who always knew he was eventually going to venture out on his own in the big wide world of wealth management, even at such a tender age, is Luke Evans.
Having started his career at Brewin Dolphin as a trainee investment manager back in 2011, he has observed and noted many changes – both at the firm itself and the wider industry. This, along with the experience of working his way up at a large wealth manager, made him feel last year that the time was right to set up on his own, opening a Mayfair office under the Raymond James umbrella.
He has seen the impact of regulation with the introduction of the retail distribution review (RDR) and Mifid II, and at Brewin he observed the transition to more centralised buy lists and model portfolio services.
Evans believes it is those changes, along with the skills and experience he picked up at Brewin, which have given him the opportunity to set up a successful business of his own.
He says: ‘The opportunity to offer a highly bespoke service for my clients is growing across the piece as more firms move to a centralised buy list and model driven approach.
‘That tailored portfolio is more valuable to the underlying clients, so actually the opportunity set was increasing at a time when I felt relationships with clients were very strong and I had the skill and acumen to go off and do that by myself. That was part of the opportunity.’
Evans has also witnessed the fallout of an office merger, having started at Brewin Dolphin's Brighton office and been there when it was consolidated into the Reigate branch in October 2014.
The aftermath saw seven staff leave, including Brighton branch head David Pegler.
But for Evans it was an opportunity to learn and put his observations into practice when the time was right to set up his own business.
He says: ‘I think one part of my personal development throughout that whole time was that I got to see best practice from one team that had a different background to another team, a quite Brewin-centric background.
'I could combine the most important, most valuable elements of those to ensure I add the most value to my client relationships.
‘So I’ve taken a learning experience from that whole time, and seen the positives to really create a better service, pulling on the better parts that I saw were offered by each business unit.’
Evans also has words of advice for those going through an office merger. He says the key is talking to clients and just being open and honest.
He says: ‘For me, the most important part of any merger like that is to go and see as many clients as possible as soon as possible, because the service to clients is a personal one. It is important to see people and explain to them what is happening.
‘I think just being honest and open and transparent meant these things could happen much more smoothly than you might otherwise suspect.’
Having joined Raymond James in July last year, he had set up the business officially by November. Evans offers both discretionary and advisory services to high net worth clients of intermediaries and IFAs.
The branch charges a management fee of 0.9% per year for direct clients and this is tiered after the first £1 million.
As of June, Evans had 52 clients – mostly professionals or those who had a long career – ranging in age from their 20s to their 90s, with an average portfolio size of £500,000.
Assets under management at June stood at £20 million, just seven months in and ahead of his target to have that amount by the end of his first year.
For client portfolios, Evans invests in direct equities, funds, exchange-traded funds (ETFs) and investment trusts, and the key, he says, is blending equities, fixed income and alternatives to each client’s individual needs.
‘You need to know what every single individual client wants, and by having that personalised relationship you’re able to gauge that much better, and that goes beyond just putting someone in a certain risk profile,’ he says.
‘You know what is interesting to them as an individual and that is what I mean when I talk about bespoke – it’s not simply changing something here and there, it’s about understanding what that person wants. If it’s more sustainability, there’s plenty of funds we can look at in that space.’
That personalised approach extends beyond just his direct clients. Evans’ business is split 50/50 between private clients and business from introducer independent financial advisers (IFAs).
He adds: ‘For IFAs it’s about not just tailoring my service to the underlying client’s needs, but to actually what the IFA’s business need is.
‘By moulding that service, we can have a much better strategic partnership which provides added value to their clients and to their business, because my skills are complementary to their own. I’ve had a lot of success in the directly authorised IFA space so far.’
While Evans evidently prides himself on the bespoke service he is able to offer clients, he does have plans in future to offer model portfolios, something which he believes will make conversations with IFAs more ‘powerful’.
He says: ‘For the time being, the focus is very much on bespoke portfolios for my private clients and clients of IFAs.
‘But in a few years, I think it would be nice to have an incubator solution, or a way to provide ISAs for family members. There’s scope to have something there.
‘It would also be more powerful for conversations I’m having with IFAs, rather than just having top-end solutions, so you can be a full service provider.’
But bespoke will always be the main focus for Evans, he says, stressing that he plans to stick with his clients for the rest of the 30-40 years he most likely has left in wealth management.
He says: ‘If a client has come to me now, I will look after them for the rest of my career. That’s what the plan is. I wouldn’t want to be just gathering clients for someone else. I think it’s incredibly important that the person you speak to is also the person that makes the decisions on your portfolio, and I think that link is instrumental to creating these bespoke portfolios for people.’
Evans also has plans to take on more people as he looks to grow his business, and in the next few months is aiming to hire a research or investment assistant to ease the burden on himself. He believes this will ‘allow the business to quite easily double in relatively short order’.
After that, he will look to take on another investment manager further down the line.
‘I think it’ll always be a relatively small team, and my focus will be primarily on looking after my clients and fostering an environment where others can look after their clients.’
Having an extra person will also help Evans, a keen traveller, take a proper holiday, something he has not been able to do since setting up his business.
Not that it seems to bother him however. Given the passion he clearly has for looking after a client’s assets, there is a sense that he sees wealth management as much as a pastime than a job.
As he says: ‘I enjoy what I do so I never switch off really. Even when I’m on holiday and reading about markets, I just absorb it because I naturally follow it anyway. It doesn’t feel like work.’