River & Mercantile has revealed James Barham has been promoted to chief executive raising questions over whether the firm should have sought an external hire as it seeks to move on from the recent Financial Conduct Authority probe.
In a press release, River & Mercantile said current CEO Mike Faulkner would be stepping back to focus on the management and development of the group’s range of macro strategies and will remain on the board as an executive director. He will become head of the group’s macro strategies and innovation.
It is the second time in a year it has reshuffled positions at its executive level.
Barham (pictured), who was promoted to the newly created role of deputy CEO in September last year, will be taking over from Faulkner as of 1 July. He was appointed to the role after the group sacked Philip Rodrigs, one of its key fund managers, following a separate investigation into a professional conduct issue.
In March, River and Mercantile was fined £109k after the FCA found the fund group had broken competition law by sharing details of the price they intended to pay in one initial public offering and one placing.
Should R&M have sought an external hire?
AJ Bell head of active portfolios Ryan Hughes said as one of the River & Mercantile founders, Barham will bring “a strong level of continuity” to the firm.
“With Mike Faulkner indicating that he wanted to focus on managing investments, this is the logical step in ensuring stability in the executive team at R&M,” Hughes said. “As a result, I expect to see little change in the business and strategy as they look to move on from the issues with the FCA in recent years.”
UK Fund Boards Council’s founder and CEO, Shiv Taneja, said it is important for firms to consider external hires.
Taneja said: “All firms should consider as wide a slate of potential candidates – both internal and external; and there are strong arguments to be made for both options, depending on the specifics of the organisation in question.”
An internal hire was not of concern to Darius McDermott, managing director at Chelsea Financial Services,who said River & Mercantile had already made improvements to procedures following the investigation. “Mike and James did the merger back in 2014 and this is a natural evolution.”
‘Long-term friendship’
Faulkner said: “James and I have worked together for many years growing the business to the successful franchise it is today, and I know he is best placed to take on the role of Group CEO from me. We will continue to work closely together in growing the business as we have always done.”
Barham said: “It is a great honour to take on the CEO mantle from Mike. Aside from a long-term friendship we have always been indistinguishably aligned in terms of our ambitions for River and Mercantile and share an equal passion for its continued growth and development.”
