A bespoke service for independent clients

Georgina Mitchell, head of investment support at Redmayne-Bentley, is questioned by Helen Burnett.

Redmayne-Bentley was established in 1875. It is an independent private client stockbroker with more than 30 branches nationwide providing clients with an accessible and personal stockbroking service.

Q: You offer several levels of service. How does Redmayne-Bentley’s execution-only service differ from the advisory portfolio and managed portfolio?

A: The execution-only service is not managed in any way. People ring up and buy what they want and sell what they want; it is entirely their own decision. On the screens we use there is a lot of information we can give clients that may help them to make these decisions, such as the yield on a share or the price/earnings ratio on a share. We can also give them the 52-week high or 52-week low, or summarise the news on the company. We also get a lot of analyst comment – not Redmayne-Bentley analysts, but what outside analysts are saying on the stock. We then have two levels of advisory service: a portfolio review service and advisory service. The portfolio review service is where you get a quarterly review and in between times the emphasis is on the client to ring us if they would like to discuss anything. The final decision is with the client. The advisory service is a lot more proactive and the discretionary service is a fully managed service where we make all of the decisions for the client and ring them afterwards to tell them what we have done and why we have done it.

Q: Do you offer your clients products from across the entire market?

A: Yes. We do not offer life products; we are stockbrokers so it is only the things we are authorised to trade in. We do offer Sipps [self-invested personal pensions] but only on the investment side – clients have to go elsewhere for pensions advice. In terms of unit trusts and investment trusts, we offer the full range.

Q: You have a “stocks and shares shop” in Leeds. Do your clients prefer a branch-based service as opposed to online or telephone broking?

A: Many clients prefer telephone broking. The shop is very popular in Leeds and a few other branches also have a shop front, but most are normal offices. Most offices do the majority of their business over the phone, but the ones that have shop fronts are quite popular. Not all of our clients live in Leeds, so they do not all get the opportunity to come into the shop.

Q: How has the role of an independent stockbroker such as Redmayne-Bentley changed now that depolarisation has come into effect?

A: I do not think we have really seen much of a change. It may have brought to people’s attention the wide range of products available and they may have realised that they can get them from a wider range of sources.

Q: Would you ever consider tying to another provider or group of providers?

A: No, we are quite proud of being an independent stockbroker.

Q: What services do you offer clients that an independent financial adviser or larger single or multi-tied provider does not?

A: In terms of independent financial advisers or multi-tied providers, we are closer to the stockmarket. They may know about funds, but we know about the stocks within the funds. It is a more personalised service, as everything we do is completely bespoke. When it gets to the advisory and discretionary services, you also have a named contact. Sometimes, if it is a call-centre type of situation, you do not get that type of service.

Q: What advantages do you gain by remaining independent?

A: A lot of people have respect for independence. We are not tainted by the image that we are recommending products to generate higher commission. We are not producing any research and then writing up a buy note. Quite a few independent brokers who have been taken over by larger houses have had to increase charges, and we have not had to do that. We do not have a list of permitted investments; anyone can buy what they want, provided they can justify why they want to buy it. We do not have a fixed asset allocation percentage. We have an investment strategy group, which does a survey every month that gives us a consensus opinion, but it is not a rule. Flexibility is the word here.

Q: Do you offer your clients access to fund supermarkets and multi-manager products?

A: We do now. We are just switching over, literally in the last few weeks.

Q: How do you feel about the menu structure following depolarisation?

A: Because it has not really changed our business, we have not really got involved. It is not a part of our day-to-day business.

Q: How would you describe your charging structure?

A: For the execution-only service it is commission-based. For the portfolio review, advisory and discretionary services it is fee plus commission.

Q: How do you research the funds you select for your clients’ portfolios?

A: We have a list of funds that we have bought historically and we have our favourites. We also go to manager meetings, listen to teleconferences and study the factsheets. On the investment trust side, you also get bits of research that you may not get with the open-ended funds. We also watch the newsflow coming in.

Q: Which products are currently selling well?

A: Chinese funds. There have been endless requests for these funds and India as well. China and India is where there seems to be the most interest at the moment. There has also been interest in commodity funds, which there are not as many of.

Q: Which products are you not seeing a lot of interest in at the moment?

A: America is probably one of the weakest areas. Certainly geographically, this is the one with the least interest at the moment.

Q: Do you think depolarisation will ultimately benefit the large multi-tied providers or the independent groups?

A: I think it will benefit clients. Whether it will benefit multi-ties and advisers, I don’t know.

Q: How would you describe the typical Redmayne-Bentley client?

A: They are typically in their late 50s or older and reasonably wealthy – either retired or approaching retirement.

Q: Do you have any plans to expand the business in the near future?

A: Our aim is always to open two new branches a year.