Warwick Wealth - February 2020

W A R W I C K W E A LT H

WARWICK WEALTH

Invest With The Specialists PRODUCTION: Colin Chinery

Exceptional client-centricity focussed on the lucrative lifestyle segment has seen international wealth management specialists Warwick Wealth become one of the South Africa’s fastest growing financial planning operations. And the momentum continues. “I believe the next 10 years will become the most successful in this company’s history,” says Managing Director Marc Wiese. www.enterprise-africa.net / 3

INDUSTRY FOCUS: FINANCE

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To trace the link between an oval ball, a croquet mallet, a four ace bridge hand and high net worth investing, reach back to a period house on an old 17th century wine estate in Constantia, Cape Town.

It was here in 2002 that Ian Kilbride and Steve Wallace formed international wealth management specialists Warwick Wealth.

Now, with offices in Cape Town, Claremont, Constantia – as well as Johannesburg, Durban, Port Elizabeth, Knysna and East London – the established investment operation offers a range of bespoke financial products, delivering arguably the best client service in South Africa.

Exceptional client-centricity is a Warwick hallmark, a management ethos driven not by merely selling a product, fund or unit trust, but by analysing specific financial needs and each client receiving a bespoke investment plan.

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// WHEN THINGS ARE TOUGH, THEY START ASKING DIFFICULT BUT IMPORTANT QUESTIONS. AND THAT’S WHERE WARWICK CAN PROVIDE THE ANSWERS // HOLISTIC PLANNING “Right from the start the focus was on conducting financial planning in a holistic way, the wealth of high net worth individuals and those with some degree of disposable income. That was where the niche was,” says Group Director of Corporate Affairs, Professor Tim Hughes.

And along with that niche, and closely identified with it, was another.

“What Ian and Steve had identified - and this was important in South Africa - was a kind of lifestyle market, people who played bowls, golf, or bridge, and so forth. And so the market for Warwick almost identified itself.”

Sport is in the DNA of Ian Kilbride, a Lancastrian who settled in South Africa in 1990. His father had played Rugby League, while Kilbride is a supporter of

Everton Football Club, still travelling the 6000 miles from Cape Town to watch his Merseyside favourites – “supporting Liverpool Football Club is one of the deadly sins!”

The genesis of Warwick – named after the English university where Kilbride graduated – was Appleton, the private client asset management he formed in 1992, with offices in Johannesburg, Durban, Port Elizabeth and Cape Town, and listed on the JSE seven years later.

Appleton, together with Cadiz Asset Management and Warwick Wealth Management are today housed under the Spirit Invest holding company, managing and administrating over $3bn of client assets, and of which Kilbride is Executive Chairman.

WARWICK WEALTH

UNIQUE PRODUCTS AND SERVICE Warwick is focused on unique products and service levels designed for the client wanting quality and professionalism.

Initially, each client meets with a qualified Warwick professional to

// A NUMBER OF FINANCIAL SERVICES COMPANIES HAVE EXTENDED THEIR OPERATIONS OUTSIDE SOUTH AFRICA, AND FRANKLY THE RECORD AND PICTURE IS VERY MIXED //

determine their specific financial needs and requirements. “We are the closest I think you will get in South Africa, to a private banking operation,” says Hughes.

“Our entire business model is about applying a very direct, personalised tailored service to the individual client, looking at the particular financial and income needs and specific risk profile.

“Altogether a holistic view of the client, with Warwick constructing financial products and offerings around it.”

WARWICK LIFESTYLE The Client Network is one of three Warwick operational arms, with a second, the Lifestyle network, one of the biggest sponsors of grass-roots sports and lifestyle institutions in South Africa, sponsoring between 200 and 600 different sports events a year, including bowls, golf, rugby, croquet,

bridge, running and cycling.

Formed in 2002, Warwick Lifestyle is the largest network of its kind anywhere in Africa, with several hundred sports, recreational and social clubs, along with retirement villages and other senior associations.

“We have built long standing relationships with clubs, some running almost 20 years,” says Warwick Managing Director Marc Wiese.

“We have established our brand, and reputation for what we can do for clients. We have built a great client base, and this will continue to be a large focus for our business going forward.”

The third - and one which Wiese believes will supply Warwick with the bulk of its planned distribution and growth over the next decade - is Warwick’s Professional Network.

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INDUSTRY FOCUS: FINANCE

“If you look after your clients very well you retain your client base. That is great. But from there we want to grow. We are one of the fastest growing financial services in South Africa, and we are very ambitious.”

PROFESSIONAL NETWORK Launched in 2007, the Professional Network is Warwick’s direct link to the thousands of industry professionals working throughout South Africa and around the world, a vast network of Independent Financial Advisors (IFA’s) and other professionals aligned with Warwick through its Succession, Intermediary, Advisory and Merger plans.

Of these, the most important is Succession Planning, says Wiese. “We believe the average IFA is older than 55, with those coming in from a new and

younger generation far less than many years ago.”

Despite an exceptionally attractive basic salary plus progression incentives package, Warwick finds direct recruiting of appropriately qualified, ambitious, young professionals highly challenging.

RECRUITING CHALLENGES “Over the past ten years in particular, it’s become increasingly difficult to find really good people of the right calibre and qualities and yet the quality of our wealth specialists improves every year.

“We have an expansion drive in Johannesburg to secure more wealth specialists, and the latest we appointed there was late last year.

“After narrowing down from way over 100 applications we went through 58 interviews, and only one was of the

// I BELIEVE THAT THESE WILL BECOME THE MOST SUCCESSFUL TEN YEARS IN THIS COMPANY’S HISTORY //

Marc Wiese, MD Warwick

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right calibre for Warwick. We won’t appoint for the sake of appointing.”

So Succession Planning and mergers are the dual keys to operational growth. “We offer by far the best succession planning deal for IFAs looking to exit the industry or retire.

“We estimate there is going to be in excess of R100b to potentially up to R400b IFA investment books looking to retire.

“This, along with mergers, gives us a tremendous opportunity of extending a structured approach, meeting each client face to face, explaining the benefits, and slowly but surely, transitioning them and meeting their financial planning needs.

“The other offering we have within the Professional Network, is our Intermediary plan, an opportunity to partner with Warwick and earn a regular passive income through building a bespoke financial investment strategy.”

With more than 100 staff at offices in Cape Town, Durban, Johannesburg, Port Elizabeth, East London, and Knysna in the Western Cape, Warwick is looking to expand over the next few years to other cities including Bloemfontein, Pietermaritzburg, and Pretoria.

BEYOND SA? Expansion beyond South Africa’s borders however is more challenging.

“There are very clear opportunities in major growth points such as Nairobi, Dar es Salaam, Lagos, Kampala where there are high networth individuals looking for the type of service we can offer,” says Professor Hughes.

“The opportunities are there, and while you don’t actually need a bricks and mortar presence, the one constraint is our model of being highly personalised, and providing that faceto-face type of service.

“A number of financial services companies have extended their operations outside South Africa, and frankly the record and picture is very mixed. And we want to make sure we get it right.”

WARWICK WEALTH

The Warwick Cape Town Sales Team

Meantime, “enormous opportunities within the financial services industry over the next five and potentially ten years” means South Africa will continue to be the company’s core focus, says Wiese “After say three or five years we will be looking at Africa – likely to become one of the big hubs at some stage in the future - as well as potentially the UK, where we already have a presence, and Australia, both of whose financial service regulation models are very similar to South Africa’s. Mauritius is another we have in view.”

If territorial expansion is active on the Warwick planner, investment, outsourcing is very much in the here and now.

OUTSOURCING = STABILITY “One of the cornerstones of investing is diversification, and this includes different jurisdictions,” says Wiese.

“I still think there’s a lot of value in South Africa, which is an amazing country. But for high net worth individuals to have a bulk of their wealth invested in an economy and stock market that makes up less than 1% of the world economy and stock market, will certainly not provide them with that required diversification.”

// WE ARE ONE OF THE FASTEST GROWING FINANCIAL SERVICES IN SOUTH AFRICA, AND WE ARE VERY AMBITIOUS // Warwick anticipated this trend four years ago, says Hughes, with an executive decision to externalise client’s funds, sometimes as much as 50%.

“This means our clients have been enjoying real currency returns and growth from our international portfolio.”

Wiese cites a company declaration that ‘Warwick as a nationally-based financial services organisation provides on average, the best client service in South Africa.’ “That’s our statement, and I stand by that.”

Recalling that seven years ago Warwick went through a period of substantial growth, he says the last three or four have been one of enormous investment some consolidation, “building an exceptionally scalable model that will give us further growth over the next five to ten years.

EXCEPTIONAL GROWTH “Last year was a tough time in the market, yet we had exceptional growth, and going into 2020 we are taking on several fairly large independent financial advice businesses. Growth for this year is pretty much set there.

“I think the industry is going to go through an enormous change over the next ten years, and I believe that these will become the most successful ten years in this company’s history.”

The Warwick MD’s comments are a refreshing counterpoint to a New Year survey showing consumer sentiment remaining at a two-year low, with household budgets increasingly constrained by slow wage growth, high tax rates, and soaring electricity prices.

“Even if the economy struggles and things are tough out there, I think in some senses it allows us even better opportunities because clients are looking for something special.

“When things are tough, they start asking difficult but important questions.

And that’s where Warwick can provide the answers.”

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February 2020

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