It is quite rare that a new name comes into the wealth management industry, and even rarer still that a genuinely new approach is brought to market as part of a new set-up.
However, new entrant Tier One Capital can lay valid claim to being genuinely different in both proposition and approach.
The team have previous experience of working for a small selection of the most prestigious names in the wealth management industry and are building both their industry reputation and client book at an impressive rate.
Graeme Potts, formerly chief executive of Reg Vardy, MD of RAC and Inchcape and current CEO of Eden Motor Group, has recently been appointed chairman, while Ian Morl, former CFO of the well-respected Banks Construction Group and current CFO of BIM-Enterprises has accepted a directorship with the company. Graeme said: “The team have been known to me and others for many years as highly competent and creative individuals and I’m delighted to be in a position to help guide and support the growth of this business on what I feel can be an exceptional journey.”
The team has built a proprietary independent cash management service called Cascade that offers extraordinary breadth.
Cascade has quickly grown in both size and scope, today tracking in excess of 137 individual deposit takers and over 650 individual accounts.
The unique optimisation process built into the process affords clients easy access to the ideal combination of cash accounts within whatever parameters they wish to set. Clients provide the basic details needed, such as their required time frames, how many institutions they wish to use and of what quality credit rating they demand. Once this is done, the Cascade service conveniently does the rest. A key feature of this is ensuring that the most attractive accounts are not only utilised at the outset but also monitored on an on-going basis to ensure that the rates remain competitive.
QUITE AN INNOVATIVE APPROACH THEN FOR CASH, BUT WHAT ELSE IS NEW?
Tier One Capital is also among the first in the industry to offer clients the option of a performance based fee for investment management. A flat administration fee is charged annually to ensure a low base cost and clients have the confidence that this fee only increases if the Tier One Capital team are materially growing the portfolio.
“The response from clients has been superb, with the general feeling that such an approach better aligns the client and the adviser for the long term,” said Stephen Black, who is joint managing director with his colleague Ian McElroy.
TWO SIGNIFICANT DIFFERENCES THEN, WHAT FOR THE HAT-TRICK?
The third area of noted innovation is the company’s recently launched peer-to-peer Private Funding Circles. The concept is based on high net-worth clients combining to facilitate a syndicated loan to other high net worth clients. In an environment where funding remains restricted to any off-piste projects or out-of-policy SME projects, this is a much-needed source of funding into the local economy. The underlying projects that form each Private Funding Circle are diverse in nature with no two projects being the same. Rates are varied in line with the degree of risk being assumed and range from property-backed loans to equity-based investment.
Ian McElroy explains: “This is a real area of excitement for our clients and for Tier One Capital.” Borrowers who don’t fit the normal mould for a tick box approach, such as maybe the classic asset-rich but cash-poor client, are able to access flexible funding, while clients who invest are able to benefit from the potential for excellent returns on capital.
“Each project bears risk to a varying degree, and we ensure to match the appropriate clients with the most suitable opportunities that cater to their personal objectives, interests and risk parameters”.
The team are now planning a consolidation period to ensure that they make the most of the opportunities in front of them. “Being able to exploit the natural creativity and innovation within the team was a core reason which impelled us to set up independently and it’s obviously a very important part of our service proposition” explains Stephen Black.
“An equally critical part, if not more so, is in the seamless implementation and on-going delivery of what we have built. The success we have had thus far, and continue to have in doing this well, is possibly the most satisfying piece of the whole process – seeing each concept turn into a functioning reality has been really enjoyable and serves to validate both our belief in the team and also in the effectiveness of our development process”.