This week has seen the launch of a new challenger wealth manager brand, Bowmore Wealth Group, which comprises Bowmore Financial Planning, formerly The Citimark Partnership, and Bowmore Asset Management.
Bowmore Asset Management’s funds under managements have doubled every year for the last three years, reaching GBP170 million at the end of 2019.
The new group will have over 25 staff working across financial planning and asset management, with over GBP350 million of assets under advice. The team behind the launch are CEO Mark Incledon, who founded The Citimark Partnership over 30 years ago, chairman Christian Yates, formerly of Lazard Asset Management, Chase Asset Management and Julius Baer and his son, Charles Incledon, who has been appointed Client Director at Bowmore Asset Management, who was previously a discretionary wealth manager at HSBC Global Asset Management, having started his career at Quilter Cheviot. Gill Millen has also joined the team as Managing Director of Bowmore Financial Planning.
The average client portfolio managed by Bowmore Asset Management is GBP1 million in size. Each portfolio has between 25-30 funds which give access to approximately 1,700 individual holdings.
The Citimark Partnership made an acquisition of Trigon Financial Services in December 2019, which added a further GBP60 million to its assets under advice. This formed part of the Group’s strategic growth plans and they report that they are now poised for further acquisitions as well as some senior hires.
Charles Incledon explains that he joined the firm some two and a half years ago and has an all-encompassing role as a chartered wealth manager but will also help the advisory team to find clients.
His father explains that he trained as a chartered accountant and joined the financial services industry in 1988.
“Within 15 months, I owned half the company and have been running it ever since,” he says. “We were an early adopter of cash flow modelling and holistic financial planning but we outsourced our investment management for 15 years, using larger firms.”
He describes the outsourcing process as a massive learning curve.
“I came to the conclusion that there might be a better way to run money,” he says. “I was also concerned about fund managers moving into the advice space as they could be competition to us in the future, so we decided to set up our own discretionary fund manager (DFM) designed specifically to meet our clients’ needs.”
That process happened in 2014.
“We genuinely believe we can come up with a superior investment proposition and our investment track record demonstrates that as we have consistently outperformed our peer group. Our returns are directly in line with our attitude to risk and we have developed a process in order to achieve that.”
He comments that the firm’s experience of outsourcing the DFM process was that it produced inconsistent returns in terms of risk. “If we have two clients on the same risk mandate we would get fundamentally different returns for them. Our opinion was that we should treat customers fairly and we had no control over that.”
Charles Incledon says: “A lot of the time and resource in financial planning is understanding what clients want and need and what is achievable and a lot of that is dependant on how much risk they can afford to take.
“Part of their intellectual property is determining how much risk they want to take and it is the most important thing, but we were being told: ‘it’s different from our end’.”
His belief is that the new firm allows both the financial adviser and the wealth manager ‘to sing off the same hymn sheet’.
“The business we run is very family orientated,” he says. “We offer a bespoke boutique service and we know and understand our clients. For us it is important to try and maintain a family oriented, personalised and more flexible service.”
Mark Incledon comments: “The driver is that distribution. We were doing a lot of work attracting quality clients and then giving away a substantial hunk of the value chain to a third party fund manager – we needed to capture more of the value chain.”
Bowmore’s clients are situated along the M4 corridor, broadly, from London to Bristol, and the firm is working to build in that client base, with a recognition from PAM that it is the second fastest DFM in the UK.
“We don’t need to build up to the size of a St. James’s Place to be an attractive proposition for our clients,” he says. “I am only where I am today because my clients won’t sell out from our personal touch. You can buy a car online but if you buy a Rolls Royce, you visit the showroom.”
Charles Incledon says that it’s important that they can tell their clients that in investment terms they are able to offer whole of market solutions, which are not limited by the firm’s size.
“We are small and we have developed the investment proposition ourselves with no benchmarks so if we decide we want to invest or not to invest we can make those decisions. If you are a client of a larger fund manager you may be immediately limiting your universe to certain investments because of your size. The full use of the investment universe gives us enhanced returns.”
The firm will be offering the three main asset classes of equities, bonds and alternatives within their portfolios, and alternatives will include hedge funds, property and structured products.
They offer a full range of actively managed passive portfolios, alongside portfolios designed for income and for ESG.
“We believe we are ahead of the curve on the ethical investment theme as we have had portfolios running for a number of years but since coronavirus, people are paying more attention to that side of things – it has definitely increased awareness with half of our new money going into ethical offerings.”
The firm has big ambitions. Mark Incledon says: “Coming out of the Covid-19 crisis there will be more opportunities for IFA acquisitions and smaller DFMs. Our objective is to build the business to over GBP1 billion over the next four to five years.”