Coutts, established in 1692, is one of Britain’s leading private banks. Based in London, it has six offices there and 16 offices in key towns and cities around the UK. Coutts is a subsidiary of the Royal Bank of Scotland.Q: How does your investment advisory service work? A: Essentially, we assign each client their own portfolio adviser. The adviser takes on a maximum of 20 to 25 clients and constructs a bespoke solution for each of them. We can allocate across all asset classes from cash up to the private equity arena, where appropriate for a client’s risk requirements. We have a low client to adviser ratio, which I think is unsurpassed in the industry. Q: How does your service differ from Royal Bank of Scotland’s private banking service? A: The main difference is in terms of the diversity of products offered within Coutts, the sophistication of the client and their asset level. RBS has a good offering; however, certain clients prefer the Coutts brand, as they may want a broader range of assets. Q: Would you describe your service as whole of market? A: We are whole of market in that we are going to third parties to source products. We also go out to third parties for research purposes. We then put all of these elements together to make a product that meets the needs of our clients. Q: What are the advantages to your particular offering? A: The primary advantage is holistic wealth management advice across a full range of asset classes. Because this is such a bespoke service, we can be much more tactical with asset allocation. The frequency of contact can also be that much higher with certain clients. Strategically, we have also been able to come up with certain products that fit the market quite well, such as the high yield bond product and our private equity offering. This is product innovation from a tactical perspective; we bring products to the clients when we feel it is most beneficial for them. Q: What services do your private clients require that a mass market client would not? A: The level of bespoke portfolio creation and tailored investment solutions particular to our clients’ ongoing changing circumstances. Mass market clients are likely to have a more stable risk and return profile. However, when the level of assets increases, a client may wish to do more. Private client profiles change more frequently and this requires bespoke solutions and keeping abreast of their ever changing needs. Q: What makes your bespoke products and services unique? A: As much as a bespoke portfolio management business is about getting the investment solution right, there is also a large aspect that has to do with people, because of the one-to-one relationship we have with the client. Aside from product innovation, we deliver a level of expertise and qualification to the client that is highly rated. Q: How do you research investment opportunities for your private clients? A: Investment opportunities arise in a number of ways that are specific to particular asset classes. For our customised investment offering, we research the market and involve outside third parties, including fund managers and other investment specialists. On a stock-specific level, we also go to certain research houses that are leaders in particular sectors, and we then use our in-house groups to vet these ideas and decide as a collective which stocks will fit in with our offering. Across the range, you can see that ideas for investment can happen through a variety of ways. We will go out and get the best provider for a particular offering and then structure this in-house to deliver a particular product. Q: Does being associated with Royal Bank of Scotland enhance your service? A: I think so. We are now one of the largest institutions in the world and this brings forward a certain clout and buying power in the financial arena. Our scale allows us to go to the market and price things more efficiently, then we bring these efficiencies back to our clients. Being part of the RBS group definitely helps us to be able to do this. Q: How does your multi-manager offering work? A: Our multi-manager offering is distinct for our equity funds and our alternative investment funds. We employ outside managers who are given specific mandates, tracking errors and performance targets. We look at each particular region and take a number of providers and give them a portion of funds each to manage in order to get the best blend of styles. We are constantly making sure that, collectively, the managers bets are not exaggerated or replicated, and that the overall fund looks right in terms of risk and return. We have an ongoing analysis of managers, and if someone is not performing, we change them. We are essentially looking to generate returns for our clients. Q: What percentage of your clients use your discretionary investment management service versus your advisory investment management service? A: This is difficult, as in terms of numbers, the discretionary service is significantly different to the advisory service because of the size of assets. We offer our advisory service only to clients who have £3m or more in terms of investable assets. So, by definition, the percentage of clients who use the discretionary service is going to be much higher. We limit the number of clients in the advisory service because of the level of tailoring and bespoke service required. Q: Which products are clients buying a lot of at present? A: The global property fund that we are in process of launching has had good interest from clients with an appropriate risk appetite. Our alternative investment offering also has a strong client following and numbers into several billions of assets under management. Our clients have a pretty strong exposure to our multi-manager products, as well. Q: As your clients are internationally-based, which global investment products do you provide alongside any onshore offerings? A: Most of our investment products are global, such as our alternative investments and customised investments, which are all currently marketable to clients on a global scale. We can also offer clients a global advisory offering through our centres in Switzerland and Asia, together with London. Clients can have assets from wherever they like and be advised from any region. This is an open-architecture way of delivering our service. Q: Why does Coutts have such a strong interest in hedge funds? A: We have had a strong interest in hedge funds since 1999. Client interest in these funds has been positive and their investment returns have been good for relatively low levels of risk. Even in a year like last year, where it was quite low for returns, alternative investments at Coutts delivered very strong performance.