Close Brothers Asset Management (CBAM) is to launch a guided digital investment service later this year, as part of a multi-year IT project, Martin Andrew, chief executive, told thewealthnet.
No exact date has been set for the launch of the new service which will sit alongside the firm’s existing self-directed investment platform.
Mr Andrew stressed that the development of digital services for self-directed investors does not signal a shift in the firm’s core focus. This remains the provision of financial advice and investment management services delivered by humans.
Nor does it mean the firm is moving into the mass market and aiming to develop a high volume of retail clients and “solve the advice gap.”
Instead the development of these services is “complementary” to its traditional offering and is aimed at meeting the evolving needs of its existing, and potential, wealthy client base.
Mr Andrew added that in regular client surveys the growth in the acceptance and desire to use digital services has markedly increased in recent years. Whilst still rating the firm highly for the personal interaction it offers, clients increasingly want to use digital means to interact with the firm as well, he said. This may only be at a basic level, such as updating personal details, but nonetheless represents a shift in attitude towards digital services.
The guided service is one element of a “major project” that the firm has undertaken with IT firm IRESS
. Mr Andrew said the technology revamp will “enhance client services” as well as benefiting staff with “improved functionality” and “ease of use”. The IT systems of the various services CBAM will offers will be “seamlessly” integrated meaning areas such as client valuation reports will be improved.
Mr Andrew was speaking to thewealthnet
on the day the firm released its results for the six months to January 2017
. He described the results as “good progress.” Adjusted operating profit reached £9.1 million, up eight percent year on year. Total client assets reached £10.2 billion, a three percent increase year on year, while net inflows totalled £125 million, an annualised three percent of opening managed assets.
At the same time adjusted operating expenses increased six percent to £41.0 million.
Mr Andrew said that most of this increase was due to staff costs. CBAM increased its headcount in the period covered the results, primarily amongst financial advice team where it added 17 advisers. He explained that with each additional adviser there was also the need to hire support staff, such as para-planners and administrative staff. This means the costs increase further.
However, he views this as “investment for future growth” as, given time, the advisers should start to increase business and generate revenues for the firm. “There are always upfront expenses and the income is generated later,” he said.
Another area of costs was property as the firm moved a number of offices. This, Mr Andrew said, does not happen very often and is a short term expense.
“Going forward I believe we have significant operation gearing in the business,” he said. “The bigger we get, the more profitable we should get. We want to progress our margins but at the same time we have to invest for the future. It is a balancing act to ensure we invest at an affordable rate.”