Barclays Wealth exodus of high-profile staff continues
Barely a month passes without news of another senior departure from Barclays Wealth. The unit, which manages £200bn of assets, resembles something of a revolving door, but the bank denies the high turnover of staff is indicative of retention issues.
But the rising number of high-profile departures, which follows a strategic overhaul of the wealth business, has led some market participants to question Barclays’ commitment to wealth management.
Christopher Wheeler, an analyst at Mediobanca, says: “Actions speak louder than words, and clearly [Barclays Wealth employees] are not convinced that they are seeing a business that is still core to Barclays’ operations.”
Last week it emerged that Henry Fischel-Bock, head of European and UK wealth management at Barclays, is to leave the bank after 10 months in the role. He had replaced Emmanuel Fievet, who was recently named the new chief executive of Banque Privée Edmond de Rothschild, in September.
Mr Fischel-Bock is the second senior executive to leave Barclays Wealth within a year of being promoted. The other was Peter Horrell, who was appointed permanent chief executive of the business in September. He will leave before the end of the year ending a 23-year career at the bank.
Mr Horrell’s resignation came soon after it was announced that Barclays Wealth & Investment Management would cease to exist as a standalone division, and would be rolled into UK corporate and retail banking.
Many others have departed since January. They include: David Semaya, head of private banking for the UK and Ireland, who retired; Catherine Grum, head of wealth advisory; Oliver Gregson, head of discretionary wealth management; and Kevin Gardiner, chief investment officer for Europe.
Mr Wheeler adds: “If people see [Barclays Wealth] becoming an adjunct to the retail banking business, people who have a real ambition to play in the ultra high net worth space will go and look for opportunities elsewhere.”
Despite the growing number of high-profile departures from the bank’s wealth arm, Barclays denies that there is a problem with retention. A spokesperson for the bank says: “[Mr Fischel-Bock’s departure] is unfortunate timing, but completely unrelated to the restructure. He got an offer he can’t refuse.”
But many market participants are unconvinced. The head of one of the world’s biggest wealth businesses, who asked to remain anonymous, told FTfm he had managed to hire “some of the best talent” from Barclays as a result of its restructuring.
“If you are shrinking and not seen to be competitive in terms of investment expertise, it is difficult [to retain staff],” he said.
Indeed, Barclays Wealth has faced problems with profitability in recent months. In 2012 it made a pre-tax profit of £274m, but this turned into a loss of £98m in 2013, partly due to restructuring charges, goodwill impairments and real estate provisions. In the first quarter of this year the division registered a profit of £51m, a 15 per cent year-on-year decline.
Assets under management, meanwhile, have plateaued at around £200bn since mid-2013. “Barclays Wealth has seen spotty performance and the bottomline is it has been pretty messy,” says Mr Wheeler.
A senior wealth management executive, who asked to remain anonymous, adds: “They struggle because they are a retail bank at heart.”
The changes at the top of Barclays Wealth since Tom Kalaris, its former chief executive, left in March 2013, have particularly unsettled employees in the US, according to Jeanne Branthover, head of global financial services at Boyden, a New York headhunting firm.
She says: “With [Mr Horrell] leaving so quickly you will see some people exit simply to not be part of a firm that is changing management so frequently.”
Ms Branthover says there are serious question marks about whether Barclays is committed to its US wealth operation. “What we are seeing at most wealth firms is growth, not excessive firing or people exiting,” she says.
“The question in the US when it comes to Barclays’ wealth business is: Are they seriously staying in it? Clients are questioning where the firm is going, and when clients question that, it’s a problem.”
In response the bank says: “Our US business continues to be an important part of our offering to clients. [Our] commitment to Wealth remains high and it continues to be an area of growth within Barclays.”
Several experienced financial advisers and wealth managers in the bank’s US arm have left to join rival companies in the past six months.
The defections have accelerated since the bank announced in September that it would cut the number of wealth markets it serves globally from about 200 to 70 by the end of 2016.
The mass retreat, part of a project named “Strategy Refresh”, led to job losses for 100 private bankers and another 50 support staff. Headcount in its wealth business has otherwise remained stable at around 8,300 employees, according to a spokesperson.
The bank claims the rate of attrition appears worse than it is as some of the bankers that were made redundant in September have only started working elsewhere in the past six months, bringing their names back into the headlines, while several of the more senior employees have left for individual reasons.
Barclays adds there are many areas within wealth where it has invested. This includes a new direct-to-consumer tool enabling investors to make their own portfolio management decisions, which is expected to go live in 2015, three new UK offices in Southampton, St Albans and Newcastle, and additional staff in its corporate employee solutions team.
The bank has also been working on the creation of an investment “centre of excellence” under the leadership of Rory Tobin, the former head of BlackRock’s international exchange traded fund business, who joined Barclays Wealth at the end of 2012.
Ms Branthover believes the naming of a new chief executive, which the bank hopes to do by September, could revive confidence.
She says: “If Barclays finds a very credible, high-profile person in wealth management, not only will that calm clients but it will bring in other business. Is Barclays committed to ultra high net worth investors, or [does it intend to be] retail and branch oriented? Who they hire will tell you that.”
Barclays appears vague about the specific expertise it expects of its new wealth chief executive.
“The CEO needs to have a lot of strengths and a lot of experience in this industry. They just need to be a good fit for the business,” a spokesperson says.
Ms Branthover, meanwhile, anticipates further departures as uncertainty lingers.
“When people don’t know what the future is, they leave,” she says. “A new leader means change and people don’t know whether that will be bad or good. The big firms within wealth and investment management are hiring, and there are lots of choices for people that are unhappy but successful.”
Source: ft
