Coutts Bank has the reputation as the leading prestige bank in the UK second only to the Queen’s bankers, Hoares. Its beautiful premises on the Strand are so discreet, one hardly notices the tellers quietly placed along one side. Coutts in terms of a luxury brand certainly meets the ‘heritage’ criteria as it has been established for over 300 years and it continues to be highly respected in a world where banking at all levels has faced scandals and challenges in recent times.
Andrew Haigh has been with the bank for some 11 years in different roles, including 2 years in China and more recently running Coutts Entrepreneurs Group which focuses on successful entrepreneurs around the UK. He is currently involved in researching future trends and is Executive Director of Client propositions.
PML: I asked Andrew first of all to tell me about Coutts’ Entrepreneurs Group
AH: Our clients are generally categorised into segments as to where the source of wealth is so we organise our activities for those segments.
The support includes content, events and provision of advice and we try to ensure we offer a club feel. It is primarily about connecting people to each other so entrepreneurs learn from one other. Too many banks feel they need to say something and intersperse themselves between the clients, but we have seen the value in putting them together with minimal interference from the bank.
PML: What are the sectors you refer to?
AH: We categorise them into entrepreneurs of which we have over 20,000 in the UK, corporate executives and high earners, professionals which include lawyers and accountants, sports and entertainment including media, international clients including those resident in the UK and finally landowners.
PML: How do you approach the idea of a having a ‘club’?
AH: Our focus is not so much on specific “how to” corporate advice because our research shows that other aspects are just as important. We focus on the individuals, not the company. Few people talk about what it feels like to be in business and how they are dealing with the issues.
So we are moving away from being prescriptive to focus our attention on what entrepreneurs encounter. There is generally a cycle of business growth, managing their exit from the business and post exit. We have created a series of reports where we have been talking to entrepreneurs about their journey – what does it feel like to bring private equity into your business? What is the exit experience like? How do you prepare for your life after exit? What was it like bringing non execs into your business? Remember that most people only do it once. You can’t go on a course or get any prior practice or of course, learn from experience, so it is helpful to learn from others who have done it.
Moreover, talking to one person who has done it is useful, but you really need to talk to many people who have experienced it. Therefore the ability to speak, to interact within a group is invaluable.
PML: What is the format?
AH: Occasionally we run panel sessions, but we are very light on the speeches!
Right now I am running a series of dinners. This is now around one per week with a break for summer. These are around the country with typical numbers under 20 plus an expert witness or two.
Everyone introduces themselves so they understand they are in a peer network and in similar positioning, they can check if there is any competition around in advance but usually we avoid that where possible so they can speak freely.
I talk for 10 minutes to warm everyone up and create a conversation upon which I draw in an expert witness.
They take it in the direction that they want it to go and we do not interfere with that.
Usually we have a broad theme such as ‘exiting your business’ and sometimes members bring spouses and partners along. This is an important aspect to the dinners and the club because they are in reality part of the team and have their own concerns.
The business has often dominated the entrepreneur’s life and therefore major shifts like selling can undoubtedly has a knock on effect on the family There are also issues such as what impact will the wealth have on your kids? These businessmen are often self made, not from a wealthy background and need to manage their wealth and its consequences with thought.
PML: Who are the people that participate in the events and do they need to be clients?
AH: They have to be our clients or potential clients. Because of the time scales, most tend to be in their mid 40s or 50s reflecting the pattern of enterprise in the UK in the last 3 decades. This dynamic is shifting interestingly because today younger people tend to work for other companies for a shorter time or avoid them altogether before starting a business, thus they become entrepreneurs at a younger age. This means that they can exit the first business at a younger age too creating a need in many cases to become serial entrepreneurs.
PML: How do you define Coutts as a luxury brand? Does Coutts see itself as a bank for luxury sector and do you work with key brands?
AH: It is not necessarily about luxury per se, it is about quality, excellence and service – going back to who these people are, most are are quite unassuming and have come from modest backgrounds. What they want are things to take stress out of their lives. That for them is luxury.
PML: Are people proud to be associated with Coutts?
AH: It is certainly an aspirational brand. We have 23 offices outside London and it is interesting to see how opening up in a new city becomes a badge of success for the city.
PML: What about the overseas element, are you well known outside the UK?
AH: Our international side is limited. We operate in Switzerland, Asia, the Middle East and some offshore territories.
PML: Do you have any partnerships, sponsorships or work with luxury brands apart from what you do with the entrepreneurs club?
AH: We have a range of links with other brands. And we have launched Coutts Luxury Index. This comprises indices across a whole range of luxury purchases and we have been looking at the performance of emotional purchases vs other investments since 2005; for example art, central London property, wine, vintage cars and classic cars.
PML: This is an exciting development and as well as a valuable tool in its own right, treating the aggregated properties as an asset class, it must be an excellent PR opportunity for the bank as it is so unique?
AH: Yes, we have been carrying out some PR around it, but there were good commercial reasons for establishing a luxury index. Coutts and other financial providers were traditionally about having costs built into a financial product. We had previously given advice rather than selling things, however we can now give advice on a holistic basis and across a broader range of assets. Legislation now demands that advice has to be costed separately from any financial product as is the case with other professional practices. The execution can be with Coutts or another provider, but As the wealth business focuses on long term strategic financial advice this piece of research by Fathom is really helpful in considering all those passion investments clients have on their personal balance sheets.
PML: Finally, can you give me one fascinating fact about luxury and banking?
AH: At the end of the day money is an enabler to do other things both today and in the future so the basics have to be right to ease busy lives but in the end the real luxury is good advice.