The newly appointed CEO of Barclays Wealth and Investment Management has outlined his new strategy for the business in a conversation with PBI.
The strategy is the brain-child of the new CEO, Peter Horrell, whose role was confirmed this week, and Anthony Jenkins CEO of Barclays PLC.
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The new plan sees the cutting of over 130 offices around the world before 2016 and a re-focus on the type of offering that Barclays Wealth and Investment Management would like to cover.
Both will lead to short term pain for both employees and revenue the bank admits.
"I’m deliberately accepting that in some of those areas you will get less short term revenue in order to get to a much better long term position." Horrell said about his plans.
"We’re not taking the easy option, we’re taking some tough decisions to get to the right long term outcome", Horrell continued.
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By GlobalDataWith the conclusion of project Gamma earlier this year, the new strategy seeks to build on the strength and capabilities that Gamma gave the UK bank.
Markets cut to 70 from 200
The strategy is in three components: A review of markets the bank operates in, a focus on key clients and family offices and an increased automation offering to clients in the ‘affluent’ end of the market.
Horrell said: "Our cross border strategies are focused on 70 markets," but said this was not always the case "we would have had bankers, prospecting in a multiple of that in the past." He continued.
"Can you deliver the appropriate operational control and efficiency to deliver commercial returns then? No you can’t."
The 70 offices, Barclays says, will still be able to cover 86% of the world’s wealthy.
Horrell would not comment on which territories were to go at this stage or if they were looking to sell businesses or close offices in each region nor how many staff would be affected.
Uncomfortable Goodbyes
The change in strategy has already led to some departures, most notably Stefanie Drews who left her position as head of key clients and family offices last week.
Horrell confirmed that not all the departures had been voluntary and said: "some have taken some decisions around their career, and there are some changes I’ve put in place."
Decisions to leave were discussed openly he said: "When I’m doing strategy, I like having an open conversation with people about their intentions, what we’re doing within the business and in getting to the right team, then I’m satisfied that those individuals, those decisions we’ve made in the business have ensured we have a great team going forward."
Horrell would not discuss if Drews or any other of the high profile departures had jumped or had been pushed.
A key part of the strategy according to Horrell was to increase the focus on the ultra high net worth individuals (those individuals with over $30m) and become a ‘gateway’ to the services across the Barclays group.
A new affluent offering
This shift in strategy has pushed ‘affluent’ clients into a new digital offering combining the retail and stock broking businesses.
When asked what this would mean for those with a growing wealth base, Horrell said that it should make the transition to a high net worth offering smoother than before.
"It’s about a client and capabilities that build with them in terms of a journey, rather than asking them to migrate between products or propositions." He said adding that the new digital offering would offer more in the way of transparency across the client’s holdings whatever the client’s level of wealth.
