Moving from Coutts, one of the best known private wealth managers in Britain, to become CEO of boutique bank Arbuthnot Latham could be seen by many as a highly risky manoeuvre. Here James Fleming tells Nicholas Moody why he’s excited about the shift and his plans for expanding in the UK and Switzerland.
James Fleming defines the description cool, calm and collected. But to this should be added excited and ready. He’s excited to have taken on the role of CEO at Arbuthnot Latham and ready for the challenge building out Arbuthnot Latham’s profile amid the hugely fragmented UK wealth market.
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Prior to joining Arbuthnot Latham, Fleming was one of six regional managing directors at Coutts responsible for managing UK entrepreneurs, landowners and inpatriates client groups. He also had extensive experience as head of international private banking and offshore at Coutts. Why make such a change and what are his plans?
"The change from Coutts was very conscious, I’ve always known Arbuthnot and you don’t step off and step on without considering all the issues and simply my eyes have been open since day one to all aspects of the move and the opportunity," says Fleming.
Pushing the business forward
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By GlobalDataThe 25-year veteran says the Arbuthnot Latham move was to go to the next level of CEO and he is excited about trying to push the business forward after a period of restructuring under its former CEO Dean Proctor. The restructuring saw the bank position itself for the post-Retail Distribution Review (RDR) period by ensuring all its planners held chartered financial status.
The bank’s wealth planning division is currently the only private bank to hold Chartered status as issued by the Chartered Insurance Institute.
Fleming is not overwhelmed by the task facing him and has several ideas where it can seize on the growth opportunities: namely focusing on its core segments while working to expand its international client base.
He identifies its target segments as wealthy City of London investors and bankers; the professional services community drawn from law and accountancy firms; motorsport enthusiasts and entrepreneurs.
Nothing can grow, however, without a solid base and Fleming is eager to emphasise Arbuthnot Latham’s stable credentials. The private bank is owned by AIM-listed Arbuthnot Banking Group with its chairman owning 53% of the share capital.
Counter-party risk: client’s chief concern
"We have a strong and stable foundation – we are not owned by a parent that can have a change of opinion as to whether they want a wealth management business at the stroke of a pen," Fleming underlines. It also has a conservative attitude to lending from its retail-funded balance sheet, with lending levels set at a 70% maximum.
"My discussions with lots of clients focus on the concerns they have about counter-party risk, post the financial crisis and it has become the top priority in their private agendas. When you are a wealthy person with £1-10-50m in liquidity you are very concerned about who you are placing that with," he says.
Fleming says Arbuthnot are now seeing a steady flow of new clients going to it week-on-week, largely dissatisfied with their current service, although he won’t disclose exact numbers.
£1bn AuM
Figures that are disclosed are £1bn in assets under management, split between discretionary managed assets, advisory based assets and about £425m in cash deposits. At the end of July, the bank had 13 private bankers, six wealth planners and 16-18 on the investment management side with Fleming outlining plans to recruit half a dozen before the end of the year.
He has already made three senior appointments in the past month, chiefly former Coutts executives Andy Mattocks as the new head of corporate development and Liz Bottomley as head of private banking. Linda Amili Clack has also been appointed to the new position of international banking director – head of Middle East private banking.
Clack’s appointment gives an indication of Arbuthnot’s direction under Fleming, who has had significant international experience. Clack is to help develop Arbuthnot’s focus on serving international clients who are either based in the UK or visiting this country. At present it has only a couple of hundred international clients.
"London is a very attractive market place for Middle Eastern clients and although we have a very modest base here at present, it’s a good opportunity for us to look at and build up a focus," he says.
A Swiss connection
Fleming is also exploring partnership options in Switzerland where the UK bank is looking to have the ability to book its clients on an international front, where appropriate, without the added responsibilities and fixed costs of running that business.
"I have been engaged in that process of discussions around building a co-operation agreement offshore," says Fleming. "I hope to have something in place before the end of the year. That will give us the capabilities to unlock the resident non-dom sector that needs that offshore capability."
This is not to ignore regional opportunities in the UK, particularly the South West centred on Exeter which it is looking to develop over next 18 months with resourcing increases.
Fleming is also in the middle of creating Arbuthnot’s strategic plan to set growth and key performance targets, which is due to be delivered late this month, which means there are no set targets to discuss.
Arbuthnot’s profile: a challenge
"In strategic terms that is what we are working on right now, to define what is the art of the possible and to be quite careful about the metric challenges and look at how we can achieve them," he says.
Fleming is cognisant of the fact that perhaps his biggest challenge remains building Arbuthnot’s profile up and out – both among clients and the wider industry.
"It’s easy to say small is beautiful but when you are small how do you get noticed? And that’s not easy because you’re competing against a lot of noise and traffic so it’s going to be tough," he notes.
Despite these challenges Fleming underlines that it is a very exciting moment for Arbuthnot Latham.
"At this moment in time, with all the backdrop of bad press in the industry, there’s a great opportunity for a small business like us to capitalise on these opportunities and to get out there and grow our business accordingly," he concludes.
