Q. What is the biggest change you have seen in the industry since you joined?
It would have to be improved regulation. Consumers are much better protected nowadays. In particular, there’s so much more transparency on fees and costs. When I entered the industry back in 1997, there was no disclosure regime. The opacity, kickbacks and inherent conflicts of interest of that era are thankfully largely gone. The FCA’s new Consumer Duty regime should also be a further positive step forward for consumer protection.
Q. What is the investment topic most often brought up by your clients?
This year it’s been all about inflation: will it stay or will it go? My view is that the current high level of inflation won’t persist. The forces that drove down inflation in the past, including globalisation and automation, will reassert themselves, helped by newer tech trends such as artificial intelligence. I don’t see the current environment as a ‘back to the ’70s’ scenario when labour had much stronger bargaining power to push up wages through the unions.
Leaving aside inflation, a perennial topic that clients bring up is the level of interest rates on cash savings and how they can get a better deal. Prior to this year, rates from cash were dire for more than a decade. Of course, in nominal terms at least they’re looking up a bit now. Despite the prevalence of market investments in portfolios, it’s important to remember many investors still want to hold cash.
Q. Which piece of regulation – positive or negative – makes the biggest impact on your day-to-day role?
As will be the case for many other wealth managers, the FCA’s Consumer Duty principle is a key priority. We’re working towards implementation early next year and currently reviewing our fee schedules for value.
The new outcomes-based approach is a significant change for the industry, which we welcome as a real positive for consumers. It also fits well with our ambition to deliver exceptional client service through a flexible combination of face-to-face advice and digital convenience.
Q. What single change would you make to the wealth management industry?
I’d like to see greater understanding from government about how important the wealth management industry is, both to GDP and the role it serves for the general public.
Our industry helps people to protect themselves from the vicissitudes of an uncertain world, so reducing the burden on a stretched and rickety welfare state. At best, this means more than simply investment management and financial planning.
At Atomos we talk about long-term financial wellbeing and how that enriches lives beyond wealth. It’s not just about practicalities; it’s a psychological and emotional benefit, about dreams, ambitions and personal contentment.
While UK wealth management is known for its economic importance, I think there is also room to recognise the social good and improvement to public wellbeing the best of our industry provides.
Q. What advice would you give to someone just starting in the industry?
Read many books on investment to help avoid making mistakes. Even after more than 20 years in the industry, I still read frequently.
Naseem Taleb, perhaps best known for his work on ‘black swan’ events and the financial crisis, is worth reading, particularly his earlier book Fooled by Randomness, which is about the limitations of human thinking. It has some great insights for the wealth management industry such as the flawed wisdom – or madness – of crowds, and why people struggle to grasp concepts like compound returns.
Additionally, Market Wizards by Jack Schwager is a book of interviews with highly successful traders, which highlights the importance of having a disciplined investment approach.
Haig Bathgate joined Atomos (formerly Sanlam Wealth) in March 2022 as head of investments. He oversees the investment proposition, private client team and investment management function.
Prior to that he was head of portfolio management at 7IM and ran boutique wealth management firm Tcam, where he was also CIO. Bathgate joined the industry in 1997 working for legal firm Turcan Connell.
This article first appeared in the December edition of Portfolio Adviser Magazine