Richard Philbin’s investment career began with an aspiration to be “fabulously wealthy”. The chief investment officer at Wellian Investment Solutions explains that the sector has appealed to him since the age of 13, predominantly because his grandfather’s brother was an investment manager working on Wall Street and earning a lot of money.
He says: “I used to ask my great uncle, ‘How do I do what you do?’ He told me to get a degree in finance and then work very, very hard.”
From then on, Philbin made this his goal and completed a degree in financial services from Bristol University in 1994. Upon graduating, he immediately began working for a network of IFAs called the Berkeley Group, based in Coventry.
Discussing his first job, he says: “I did five and a half years there, having started off as an investment analyst and ending up as a director of the business, which was very good.”
After five years he was headhunted to help set up the Towry Law Investment Management business, based in Bracknell, for a couple of years, where he focused on private clients.
However, during this period there were a lot of high-level personnel changes in the funds of funds world and Philbin spied an opportunity to move on.
“Bambos Hambi left Friends Provident to go to Rothschild, Rob Burdett and Gary Potter left Rothschild to go to Credit Suisse, and there was a bit of a merry-go-round.
“I’d seen that Bambos had left, so I cheekily sent an email to the head of HR at Friends Provident but didn’t get anything back.
“Then I asked Marcus Brookes, who was at Friends Provident at the time, who he reported to. He gave me a name and I wrote and said, ‘I’m interested, can I put my name in the hat as and when?’
“Again, I didn’t hear anything more of it until about three or four months later when he phoned me back and asked if we could have a chat.”
A leap of faith
Philbin explains that going from the private- client side into being a “true fund manager” was a big leap.
From 2001 to 2008, he was at Friends Provident Asset Management, and remained there through its many guises from Friends Ivory and Sime, then Isis and finally F&C.
“During the seven years there I had more business cards and different names than the companies I had worked for,” he says.
At F&C, Philbin expanded the assets from approximately £100m to well over £1bn.
In 2008, he was poached to set up Axa Architas and became its first chief investment officer. “When I joined, the company didn’t have a name, it was a project, essentially a big, empty office on a greenfield site.
“I was asked ‘What do you want to do and how do you want to do it?’ At F&C, I was running £1bn for a company that had £100bn under management.
“We weren’t really making a big impact in the overall growth of the business, whereas to then launch a multi-manager business backed by Axa was a huge opportunity.
“From a career development perspective, it was a no-brainer really. I worked for them for three years before leaving and then setting up Wellian with Alan Durrant.”
Plugging together
To form Wellian Investment Solutions, there was a lot of corporate “plugging together”.
Durrant and Philbin set up a multi-manager business called Harwood Multi-Manager in 2012. With private equity backing from Harwood Capital Management, the duo launched the business with the aim of creating a multi-manager specialising in unitised offerings and launching some funds.
But having done their market research and chatting with lots of financial advisers, Philbin came to a realisation.
“Financial advisers either liked or didn’t like multi-manager offerings and they liked businesses being placed on platform, whether that be something like Ascentric, Novia or Transact,” he says.
By offering only half of the proposition, they were only getting half the potential money. There were also a number of competitors in the space, already doing either unitised offerings or discretionary offerings, not both.
As a result, the pair opted for both and planned to launch some funds and create a discretionary fund management business.
“Having done a lot of work we realised that the best way forward was to buy some funds and to buy a discretionary fund manager,” he says.
And with that thought Wellian Investment Solutions was born.
In April 2015, Philbin and Durrant bought Wellian, and as Harwood Multi-Manager was just a trading name and Wellian had been around a long time, the pair thought it was logical to take on the name.
Independent approach
Philbin argues that Wellian’s approach is very different to his peers.
He says rather than building a portfolio around which country, region or asset class they like, it is based on risk profiling and risk tolerance to give managers more control.
“We have a saying, that goes, ‘The answer is seven, what’s the question?’
“If we looked at this boardroom which has 12 chairs around it and said, ‘The answer is seven and each person must give an answer to how you get there but it can’t be the same as a previous one’. Everyone around the table could come up with a different answer.
“I wanted independent thinking from everyone in the team because there isn’t one correct answer when it comes to investing in portfolios.”
Being mindful that risk profiling is a growing element of a financial adviser’s role, Philbin says he didn’t want his managers to be constrained by specific requirements.
However, although the team takes the approach of looking at everything at portfolio rather than individual asset level, as a firm they are considering the UK once again.
“We have historically had a much lower allocation to the UK compared with a number of our peers but the UK is starting to look more appealing.
“We are spending more time assessing value managers and looking increasingly at global funds, by which I mean funds that will invest globally.
“Additionally, we’re looking at smaller-cap managers and, where permitting, we like absolute return, but trying to find absolute return being positive absolute return, rather than not negative or no return.”
Philbin says that one of the reasons Wellian is leaning towards the UK is because of the volatility of the currency.
While the UK is “probably the most hated of the mature markets”, either because of Brexit or political uncertainty around a Corbyn- led government, Philbin says that at the end of the day, the majority of Wellian’s clients are going to be sterling investors.
“From a correlation and volatility basis and from a value versus growth perspective, compared with a lot of other markets we think the UK is not so ugly.
“Ultimately, we are trying to build a diversified portfolio in everything we do, and that’s really important to us.”
Regulatory burden
A recurring talking point in the industry today is regulation and the continuous additions to it. Philbin says his pet peeve working in investment is that “regulation and compliance is ridiculous”.
“This is my soapbox at the moment. The regulator spends far too much time looking at the word ‘financial’, much to the detriment of ‘services’.”
In a people-driven industry, the regulator’s decision to clamp down on gifts and hospitality annoys Philbin. The change in regulations now means you’re unable to go for a coffee with a sales person, purely because it’s deemed as an “inducement”.
“When do we get to spend time with people and understand what they do and how they do it, and what’s making them tick? “It’s not just about your performance numbers, it could be that you’re going through a bad time in your married life or your children are having trouble with their exams or anything.
“The person you see with a tie on can be very different to the one you see out of the office. I’m all for transparency but I think this is ridiculous.”
Philbin believes the regulator’s move away from services will negatively affect the next generation of analysts and managers coming through.
