Berry Asset Management chief executive Jamie MacLeod is in negotiations with a number of platforms about adding the firm’s model portfolio service as part of a more aggressive push to target the IFA market.
The firm, which was formed 30 years ago and has £640m under management, has traditionally only targeted highnet-worth clients with investable assets of over £250,000 through its bespoke discretionary portfolio service.
However, the firm launched five risk-graded model portfolios through a partnership with wrap platform Novia last June and is speaking to other platforms. The model portfolio service has a minimum investment of £1,000 and annual management charge is 0.3 per cent.
MacLeod (pictured), who was Skandia Investment Group chief executive, has been head of the business, which has 35 staff, since last September after founder and managing director Jamie Berry stepped back from the day-to-day running of the business to become executive chairman.
Forty per cent of the business is introduced by IFAs and the rest is introduced by other professionals such as lawyers and accountants.
Seventy per cent of the business is owned by Geneva private bank Bordier & Cie, 20 per cent by MacLeod and the remaining 10 per cent by the rest of the Berry management.
MacLeod says: “We are an owner-managed business. The whole business is about doing the right thing for clients. There is not a separate finance department telling us what to do.”
He says the firm is looking at its partnership with Bordier and how Berry clients can benefit from the bank’s services. “If our clients need to buy and store gold bullion, we can do that through our partnership with Bordier. We are looking at offering custody services to our clients through Bordier too.”
MacLeod says that despite this close relationship with Bordier, there are no plans to rebrand the firm. He is also clear about the need to keep a division between the role of discretionary wealth manager and financial adviser despite the roles and brands being blurred elsewhere in the industry.
He says: “Advice is best managed by people in the advice world and investment management is best done by us. We do not do any financial planning and have no intention to do so.”
MacLeod sees it as a tough challenge to be proficient in both advice and management in a competitive industry.
He says: “If we were to offer detailed pension investment advice, we would have to evolve. There is a risk that if as a business you become too diversified, then you can neglect your core principles.”
MacLeod says the firm is fee-based and ready for the RDR. He says: “We are not concerned about changing regulation. Capital market risk is more important. These things happening around us are alarming such as Kodak going into bankruptcy protection.”
MacLeod says he has not set specific targets for asset growth. “If you do the best thing for clients and do that well, the rest will look after itself.”
Jamie MacLeod on…
”There is more change to come before January 1. I do not know what. I just have got a feeling. The puppet masters of the RDR are under pressure and lots of strings are influencing how it will appear.”
”The biggest challenges to wealth managers are increased regulation and regulatory costs and the downward pressure on costs and margins by consumers wanting to pay less.”
”The cost of advice could go up but there will be a huge need for IFAs after the RDR. They are appreciated by clients and are accessible.”
On new investment areas
”We are not ignoring esoteric products. Where there is complexity, we look to see what the motive is for it. We do not like spin. The investment thesis behind alternative energy funds is good but it has not paid off yet in terms of returns.”