The collapse of Lehman Brothers in 2008 was memorable for Bestinvest chief executive Peter Hall, who was working as managing director of UBS Wealth Management at the time.
“I thought I was joining the most conservative, secure Swiss bank in the world but while I was there it turned out it had racked up £40bn of losses in terms of the Lehman crisis. I was reassuring clients through a period when they wondered whether their money was safe at all.”
This is just one of many experiences that have contributed to the growth of Hall’s career.
He landed his first role in financial services straight from university as client relationship manager for SG Warburg and then moved on to a manager role at Boston Consulting Group before joining Barclays Capital and Barclays Global Investors as strategy director.
It was not long before Hall was offered the role of chief operating officer for Barclays in New York, taking his family with him to the US for two years.
“It was totally impulsive. I had a fabulous time and the kids were young so they loved it. I came back with an American drawl and loving baseball,” he remembers.
Hall then decided to move back to the UK as chief operating officer for Barclays Wealth, before becoming chief executive at Barclays Stockbrokers.
Then, after four years as managing director of UBS Wealth Management, he was approached by Bestinvest for the role of chief executive.
Hall says it was Bestinvest’s unique business model that attracted him.
“It seemed to me to build on the Barclays experience, which was a bit more execution-only, and the UBS experience, which was a bit more high-end-worth management. The ability to offer a client to do it themselves through direct channels or to have a high end worth management service is very unusual.”
Formed in 1986, Bestinvest currently holds around £4.7bn in funds under management and services more than 50,000 clients.
With the Select execution-only service clients can choose their own funds and shares through a variety of wrappers, while a full investment management and advisory service is also offered if clients want face-to-face advice.
The advisory service in conjunction with the Select service caters for what Hall calls the “orphan” clients – those who may have been abandoned by IFAs or banks post-RDR and do not want to pay fees for advice going forward but still want some form of advice.
“They are different to the execution-only clients,” he says. “They do not just want to deal online, they want to talk to someone over the phone.”
Hall says since the launch of the Select service in 2011, it has attracted more than 25,000 clients. He says many of these clients have moved to the firm’s advisory service.
“A number of them have now gone for the full advice because they have realised that managing a portfolio is quite complicated to do yourself,” he says. “It has actually convinced
a lot of people to take advice as opposed to just using our execution-only services.”
When asked about the FCA’s warning that execution-only services could be subject to advice rules if customers believe they have received advice, Hall says he is very much in favour of this.
“There is a grey area with some execution-only providers, where they provide planning tools online which ask the clients about their needs and risk profile, then appear to come up with a recommended solution. I do think the industry will benefit from greater clarity as to whether that is an issue,” he says.
But he adds this is not an issue for Bestinvest. “We don’t go out to try and understand from our client their basic needs and risk appetite. So in our case it is black and white and I don’t think there is any grey area in the middle. I feel totally comfortable with it.”
Hall says the firm is looking at introducing clean share classes for all the funds it offers. Although he says the phasing of this process will be tricky, a regulatory requirement for all funds to be changed to clean share classes would be a positive move.
“There is going to be a period which is going to be quite difficult operationally in terms of moving the clients across from one to the other, but once we are through that, which should be within the year, it will be a much better solution for clients. It is very confusing at the moment for clients in terms of what they are paying for what service.”
Hall says Bestinvest has experienced significant growth over the past few years. When he first came on board, the firm’s net new assets were zero. It is now stands at £300m for the year.
In the next five years Hall wants to double Bestinvest’s current assets under management to £10bn and will be looking at big acquisitions to achieve this.
“You need scale in order to be efficient in terms of all the support costs and compliance that one needs in a business, so it will be important for us to acquire. You need to think about radical options. You don’t get there through a few small acquisitions, you need to look at tying up with some other big players.”
Education: University of Oxford
Career: 2010-present: chief executive, Bestinvest; 2006-10: managing director, UK regions and investment wealth management, UBS Wealth Management; 2001-06: chief executive, Barclays Stockbrokers, Investment Management and Trust company; 1999-2001: COO, Barclays Wealth; 1997-99: COO, Barclays New York; 1995-97: strategy director, Barclays Capital and Barclays Global Investors; 1991-95: manager, Boston Consulting Group; 1985-90: client relationship manager, SG Warburg
Likes: Skiing, tennis, shooting and trekking
Dislikes: People being negative, sloppiness, people doing something wrong and not taking responsibility
Book: Into Thin Air by Jon Krakauer
Film: Schindler’s List
Album: U2’s Greatest Hits
Career ambition: For Bestinvest to be known as offering a high-standard professional service at great value
Life ambition: To help give people an opportunity in life through better education
If I wasn’t doing this I would be… trekking around Nepal, Bhutan and Mongolia with my wife