What the broker scores in our wealth management survey

ABSA PRIVATE BANK/ABSA WEALTH MANAGEMENT

OverallAbsa’s wealth management and private banking offering covers the full spectrum of products and services, including an impressive family office. Despite the sale by Barclays Plc of its Africa operations, the group’s access to Barclays’s global capabilities and all partnership agreements remain. The Wealth, Investment Management and Insurance unit is the integrated nonbanking financial services provider to Barclays Africa and other partners across the continent, including life insurance, nonlife insurance, investment management, and fiduciary. It uses a combination of in-house products and “open architecture solutions”.

What we sayAbsa’s performance has to be taken in the context of the marriage to and divorce from Barclays Plc, a difficult process that has distracted it for years. In that light, its underperformance in these awards given its size and muscle is understandable, but it should be concerned by the rankings given to it by its clients in the People’s Choice survey.

Eligibility* Absa Private Banking: R750,000 annual salary, with exceptions.* Absa Wealth & Investment: R10m/year net income; family office: R200m net asset value.

BRENTHURST WEALTH MANAGEMENT

OverallBrenthurst Wealth is a medium-sized independent financial advisory company focusing on high net worth clients. It uses predominantly external products, but recently has started in-house funds. The firm has been on a marketing drive and says this is paying off, resulting in expansion, particularly in the Western Cape.

What we sayThe company is enjoying a noticeable period of success, reflected in its expansion and development of new products to meet client demand. MD Brian Butchart says a strong marketing drive has been instrumental to the firm’s growth. Client communication is at the core of that, with regular newsletters and seminars focusing on topical issues. The firm has never had minimum eligibility criteria but weighs the cost of taking on a new client so that it makes business sense, and the new funds were primarily launched to cater for the smaller client market. The firm has improved markedly since its debut participation in 2015 to win the award for Top Wealth Management Boutique this year.

EligibilityNo criteria.

FNB PRIVATE WEALTH/ RMB PRIVATE BANK

OverallAn efficient, competent all-round offering from FNB/RMB, spanning banking and wealth management services with strong capabilities at the top end of the wealth spectrum catering for internationally wealthy families. It goes beyond traditional service areas to focus on entrepreneurs (in conjunction with FNB Business), nonmetro and agricultural communities. The group has been intensifying its client-centric approach with increased focus on banking and advising across the family structure, managing intergenerational wealth transfer. It has also launched offerings for the wealth market, one notable development being its Private Wealth Academy in collaboration with the Gordon Institute of Business Science and The Academy of Financial Markets to help build financial literacy among its client base.

What we sayThe FNB/RMB group won the 2015 Top Private Bank award. Its submission to the judges didn’t carry as much detail as top-ranked firms. Client rankings for the group have also fallen from previous high levels. In part, the drift has occurred as the centre of gravity in the group has moved from RMB to FNB.

Eligibility* FNB Private Wealth: Salary of R1.5m or NAV of R15m.* RMB Private Bank: Not disclosed.

GRADIDGE-MAHURA INVESTMENTS

OverallThis eight-year old boutique has established itself as a force in our surveys and takes second in the Top Wealth Management Boutique category. The group does not offer discretionary investment services, with operations manager Cyril Chetty saying the priority in the first few years was to build up assets and ensure a sustainable business. It is privately owned by individuals, with 95% black ownership and 100% black management. Chetty says the initial approach was to focus on the black middle-to high-income market in SA, but the company has since positioned itself as a wealth management business to all South Africans in its target markets. Its focus is on the first three of Intellidex’s archetypes.

What we sayA particularly strong showing in the up-and-coming professional archetype along with being the second-ranked boutique reflects the strength of this firm within its target market. This is the second year it has participated in this survey and it continues to impress. However, this year its clients gave it lower ratings than last year.

Eligibility

* Retirement clients: R500,000 preservation and R1,5m retirement capital.* Young professionals: four-year/honours degrees.* Investible assets of R500,000 and/or household assets of R20m.* Senior managers: earnings of R700,000/year.

MAITLAND

OverallMaitland focuses on the top end of the wealth market with strong international and full family-office capabilities. It is privately owned by staff and management, and runs in-house funds designed to pool the capital of smaller clients. These are not sold to clients but used “where the efficiencies of pooled portfolio management are very certain”. It’s a means to accommodate clients who don’t fall squarely into its target market, though it doesn’t cater for our first archetype, the lump-sum investor. It is on a global expansion drive.

What we sayMaitland falls into a slightly unfortunate position in our survey because it is too big to qualify for the Top Wealth Management Boutique award, so has to compete with the big banks and Sanlam for the main award. Furthermore, not enough of its clients completed the People’s Choice survey for it to be ranked for that award. However, the judges were impressed by the quality and scope of its offerings and the depth of its expertise in its responses to our archetype clients. It stands out for its sophisticated thinking on multijurisdictional tax and legal thinking.

Eligibility* Discretionary portfolio management: R25m.* Family office services: R250m.

NEDBANK PRIVATE WEALTH

OverallNedbank’s wealth offerings operate through Nedbank Private Wealth SA and Nedbank Private Wealth International. It has offices in SA, the UK, Isle of Man, Jersey, Guernsey and the United Arab Emirates, with SA clients having full access to its international services. It offers the full spectrum of services and products across the wealth spectrum. NPW provides discretionary investment management services directly, in conjunction with third-party products/investments in client portfolios. That is to provide diversification by investment manager, style, mandate, asset class and geography. It offers clients a consolidated view of their financial position, regardless of where their money is managed.

What we sayNedbank is getting more competitive every year in our survey. This year it wins two archetypes, up-and-coming professional and wealthy executive, and is second in the lump-sum investor category. In its response to our archetypes we were particularly impressed with the detail — it spelt out all implications of all options. It’s also very popular with its clients, finishing second in the People’s Choice award.

Eligibility* R1.5m/year or R5m investable assets.

NFB FINANCIAL SERVICES

OverallNFB’s target market is primarily the high-net-worth and ultra-high-net-worth client, but it also runs an online investment platform to provide services to the broader market. The firm also provides advice to large institutions such as pension funds, university endowment funds and companies. It prides itself on staff retention: most of its advisory team are home-grown, and graduated into being shareholders in the business. NFB is a wholly owned subsidiary of the AltX-listed NVest Holdings Group. It has an asset management business, providing execution-only advice using either in-house or third-party solutions, as well as discretionary investment management. It is known as the “farming enterprise”, as it is particularly strong in the agricultural sector.

What we sayIts responses to our archetypes were comprehensive with a few nice touches, including acting as the “financial conscience” for the young professional who lacks financial discipline. It strikes us as being highly competent, with strong expertise in its target market. NFB ranks third in the Top Wealth Management Boutique category, and its clients give it high rankings throughout. It finishes second in the People’s Choice survey for Top Wealth Manager.

EligibilityNone.

OLD MUTUAL WEALTH

OverallOld Mutual Wealth operates through two primary entities, Old Mutual Wealth Private Client Securities and Old Mutual Private Wealth Management, supported by the wider group’s vast investment capabilities. The former offers bespoke portfolio management on a full or limited discretionary basis with full access to global markets, model portfolios and a wide range of investment vehicles. The latter, through its ownership of Acsis, is focused on becoming a fee-based, advice-led business. The group prides itself on being a partner to its clients, using its resources and experience to guide and advise clients on articulating goals and to manage lifestyle issues as much as wealth management. It is fully capable of servicing clients across all archetypes.

What we sayUnfortunately, this is the first year Old Mutual has participated in our survey, and it provided only cursory archetype responses. We therefore did not score it in the archetype categories. Client rankings were mostly positive, but it appears there is room for improvement. We do expect Old Mutual to be competing strongly for the top rankings in future surveys.

Eligibility* R480,000/year or investable assets of R1m.

PSG WEALTH

OverallIn keeping with the ever-evolving wealth management industry, PSG Wealth constantly strives to improve. Its business model differs from the rest in that each branch is its own profit centre, though all financial advisers are PSG employees. This gives it an unmatched geographic reach nationally. It is also beefing up its international reach through its office in Mauritius, which will form the hub to service clients transacting into Africa. The group has also restructured PSG Trust, with fiduciary advisers now owning their practices.

What we sayPSG Wealth is a consistently strong performer, scoring well across all archetypes to finish third overall. It consistently delivers good service: it finished third in the People’s Choice award in the Top Wealth Manager category. PSG has the capabilities and in-house expertise to cater in full to all archetypes. The firm is impressive with its entrepreneurial spirit and ability to partner with clients and list businesses, as it has done with Curro and Capitec. PSG Wealth is positioning itself as an investment optimist, saying it does not agree with the negative sentiment about SA’s future. It has launched a campaign to engage with clients through 170 client functions to “help them see the bigger picture” and to prevent them from disinvesting “and missing out on the next bull market”.

EligibilityNone.

SANLAM PRIVATE WEALTH

OverallSanlam Private Wealth recently completed the acquisition of Brackenham Investments, based in KwaZulu-Natal. That’s its latest move in a long-running expansion drive, including purchases of Sanlam Global Investments, Calibre Investments in Australia, Summit Trust in Switzerland and two firms in the UK that were merged into what is now Sanlam Private Wealth. The firm has also been on a drive to improve communication with ultra-high-net-worth clients, and in the past few years has been running retreats on preservation of wealth for future generations.

What we sayA large group with international muscle, Sanlam is extremely strong in specialised legal, financial and exchange-control issues, as well as local and international tax. Scores above nine points in four of the five archetypes reflect the all-round excellence offered by Sanlam Private Wealth. This year it slips off the top of the wealth manager rankings to take second place. The one area where it has lagged is in the People’s Choice survey and this year it slips out of the top five. We must point out, though, that while its clients generally score it lower than the other top-ranked firms, the freeform comments are always highly positive and full of praise for its services.

Eligibility* Discretionary portfolio management: R1m.* Global discretionary portfolio: R1.5m.* Wealth management: R10m net investable assets.

STANDARD PRIVATE BANK/WEALTH & INVESTMENT

OverallScoring nine points or more in each of the five archetypes secures Standard’s extensive wealth grouping as the 2017 Top Wealth Manager of the Year, while it also bags second place in the Top Banking Services award. This is a huge organisation with strong African and international reach, but from its responses it is clear that it manages to integrate its various operating units seamlessly to offer clients a holistic, full-spectrum service. It also offers exceptional art and philanthropic capabilities.

What we sayStandard consistently focuses on the client and we’ve long been impressed by the personal touch it brings, preparing clients for psychological and emotional issues they might face as well as financial ones. It also runs leadership academies for clients and their children. It lists a host of other initiatives, many focusing on the family members of clients, that makes it stand out. We were particularly impressed by its response to our internationally wealthy family archetype. It went into depth, describing not only the options on offer and implications of each, but also how assets held in various jurisdictions might be affected by tax and hereditary laws, supplemented by proposals on what to do in each instance, for example to improve tax implications. Frankly, there are no weaknesses to its offering, and a third-place ranking in the People’s Choice survey shows it has succeeded with its client-centric focus.

Eligibility* Private bank: Income of R1m/year.* Wealth & Investment: Potential investable assets of more than $1m/year.

STONEHAGE FLEMING FINANCIAL SERVICES

OverallAfter merging with the UK-based Family Office Fleming & Partners in 2015, Stonehage Fleming Financial Services operates exclusively in the internationally wealthy family market segment, so it doesn’t compete for the overall award. It won this category in the past three years, but this year was overtaken by the bigger players..

What we sayIts past record in this archetype reflects its excellence in this competitive market. It offers strong capabilities in addressing complex international requirements while paying attention to lifestyle issues. It works closely with families on governance and investment issues to encourage the perpetuation of family values and reduce conflict. Not enough of its clients completed the People’s Choice survey for it to be ranked; but the fact it has managed to grow assets under management by an average of 33% over the past five years shows it is getting things right with clients.

Eligibility* Ideal client has a net asset value of more than $20m.

VERSO WEALTH

OverallA strong entry from this newly formed firm, winning the People’s Choice award as Top Wealth Manager and ranking fourth in the Wealth Management Boutique category. Verso Wealth was formed through a 50:50 merger between the Verso Group and Galileo Capital Grow in 2015. The Verso Group specialises in providing retirement fund administration and advice on employee and medical aid benefits. It is the first time this firm is participating as Verso Wealth, though Galileo Capital participated previously. The new business offers independent financial planning and estate planning advisory services to medium to high-net-worth individuals and their families. Other group companies offer employee benefits and other services, along with specialised services including short-term money market brokering.

What we sayWinning the People’s Choice award shows that, through its transition, the firm has managed to maintain the high client satisfaction levels achieved by its predecessor, Galileo Capital, which won the People’s Choice last year. Clients were positive in their comments and gave exceptionally high rankings on satisfaction issues.

Eligibility* Investable assets of R1m or more.

INVESTEC WEALTH & INVESTMENT/PRIVATE BANKING

We encourage all the bigger companies involved in wealth management to complete a questionnaire to enable our judges to assess them. This year Investec and Citadel declined to do so. We discuss their offerings below, gleaned from our research.

What we sayThis year, Investec again had the highest ranking in the People’s Choice survey. It provides the full spectrum of services across private banking and wealth management. It has a prominent presence in SA and the UK, where it is in the top three private client investment managers in terms of assets under management. It boasts in-house expertise and is strong in international banking operations. Investec has in previous years done well in various archetypes, particularly the successful entrepreneur archetype.

Eligibility* Private bank: Degreed, salaried individuals earning a minimum of R800,000/year. * Wealth and investment: Investable assets of at least R20m.

CITADEL

What we sayCitadel, a wholly owned subsidiary of the listed Peregrine Holdings, has been pursuing a growth strategy and is now consolidating. It has merged the recently acquired The Wealth Corp and other business units into the Citadel brand to form Citadel Wealth. It acquired Consolidated Financial Planning, now called Citadel Financial Planning, and launched a specialist private client share portfolio company, BayHill Capital. These changes have grown the demographic footprint, enhanced client interaction and expanded its investment solutions, providing greater flexibility for clients and new ways of accessing financial markets. Through BayHill, it offers domestic and offshore direct share portfolios. The firm provides bespoke wealth management solutions, widening its focus from its past specialisation in wealthy retirees.

Eligibility* Flexible/R5m in AUM.