A LOT has happened over the past 254 years. War and peace has engulfed the world, financial markets have risen and fallen and businesses have flourished and collapsed. However, wealth management firm Brewin Dolphin has not only survived the test of time, it has also managed to reinvent itself to stay relevant.
Formed in 1762 by stockbroker John Dawes, the FTSE 250 company has formed itself into one of the largest investment management and financial planning firms in the country, home to 28 offices throughout the UK and Channel Islands.
In safe hands
Since 1994 Brewin Dolphin has been on the London stock exchange and since 2013 its finances have been looked after by FD Andrew Westenberger, who began his career in 1990 as a chartered accountant, serving at a company that would eventually become the spine of PwC.
“I qualified as a chartered accountant with Coopers and Lybrand just round the corner from here,” explains Westenberger, who started out as a junior on the audit team, working on the notorious Maxwell audit. “Then in 1993 I went to work for Bankers Trust which was an American investment bank, at a time when they were starting to really grow post-big bang and coming to London.”
Westenberger cut his teeth at the company’s product control division before the firm was bought out by Deutsche Bank. Long before the sector was hit by the financial crisis, Westenberger crossed the Atlantic to begin the next stage of his career.
“I was actually posted to New York in 2000 by Deutsche Bank, and while I was there I left to join Barclays Capital,” he says.
Westenberger travelled between London and New York during his eight years at Barclays’ investment banking division, starting out in credit derivatives in New York, before running financial planning and analysis in London.
After having child number two in the UK’s capital, Westenberger and family went back to New York in 2003, where he served a number of finance roles at the company, including COO at the firm’s credit markets business.
“That was fun because it was different, and again, it was the maximum point of the financial bubble,” he says. “Everything was growing at 25% compound.”
However, on 11 September 2001, New York grinded to a halt by a tragic event that Westenberger narrowly avoided.
“I was in the World Trade Center a week before for a 40th birthday party,” he says. “I flew out of New York the night before [9/11] and I was in the UK on a business trip with Barclays, but my wife and family were still out there. I watched it all unfold on TV and I was on the first plane back a few days later.”
After a career’s worth of hopping between London and New York, in 2004 Westenberger stayed in London as the firm’s global head of financial control, but his time at Barclays Capital was cut short in 2008.
Period of Evolution
Westenberger was a casualty of the financial crisis and was made redundant, but upon reflection he saw his departure from Barclays Capital as a blessing in disguise.
The redundancy led Westenberger to become group FD of financial services company Evolution Group, a listed, £300m mid-cap firm, which he says was the best thing to happen to his career.
“My feeling then was serendipity because if I was to stay at Barclays Capital I would have had less opportunity to move into a plc role,” he says. “Although you get a lot of responsibility and you are well rewarded at these big banks, you’re a much smaller cog in a big machine and you don’t get the breadth and experience I got at Evolution.”
In 2011, around the same time the company was bought out by Investec, Westenberger left Evolution, but was well prepared for his next role as finance director at Brewin Dolphin in January 2013.
Almost immediately after joining the firm, Westenberger put his stamp on Brewin Dolphin, which to him was going through a period of ‘indigestion’ due to a number of acquisitions made over the years.
“We were going through a period of… I think ‘turnaround’ is probably too strong a word, but a period of refocusing of the business over the past three years,” he admits.
Almost as soon as Westenberger joined, the company’s senior management changed, as executive chairman Jamie Matheson retired and David Nicholl was promoted to CEO, but Westenberger was about to make an even bigger change at the firm.
“One of the first things I had to do was make 100 people redundant from our corporate central function, which led to a £6m staff cost reduction,” he says. “The business recognised that it needed to establish some credibility with shareholders who were becoming slightly impatient with the lack of progress with the profit margin.”
As well as the redundancies, one of the first things Westenberger did was strengthen the firm’s finances, raising £40m to firm up the balance sheet.
“We also sold Stocktrade, our execution-only business and focused on our core discretionary investment management service and pushed even further into the world of financial planning advice,” he says.
Time to grow
Despite the business having existed for more than 250 years as a stockbroker, investment manager and now wealth manager, Brewin Dolphin needed to change identity slightly in order to stay relevant in the highly competitive market.
“There were cheaper substitutes out there already like Nutmeg and robo-type advisers, so it was key for us that in order to stay relevant we needed to be more advice-focused,” says Westenberger.
Around that time, Westenberger had to execute more substantial changes.
“The profit margin was languishing at around 15%, so we set a new target of 25%, which we still have in place,” he says.
In 2014, the finance director took a “very big decision” to terminate Brewin Dolphin’s expensive technology project.
“It had been designed to try and introduce more efficiency into the business,” says Westenberger, but the project was burning a £33m hole in Brewin Dolphin’s pocket and he soon found himself cutting the project, which came as an initial shock to shareholders.
“When you put that RNS out, that’s no small feat,” says Westenberger. “But the decision was a classic example of how finance needs to always be looking forward, not backwards.
“We can’t make apologies for the past, but we knew that we needed to adopt a different strategy, which is what we did. We continue to streamline the business and we are integrating technology in a far more modular way, and I think that they [the shareholders] accepted the decision.”
Another way in which Westenberger adopted a different strategy was by removing outdated software Lotus 123, the predecessor of Microsoft Excel, from the business.
“I was quite shocked to find that we still used a product which is not even supported by its vendor anymore,” he says, adding that the software has “just gone” from the company.
The removal of the archaic tool allowed Westenberger to reflect upon how over the past 250 years, the company had both flourished, but had also fallen behind in some respects.
“The firm had grown rapidly in recent years and the finance function had grown with it by adding bodies, but it hadn’t really thought about what the role of the finance function was and how the finance function could add value in the long-term,” he says.
“When I joined, it [the finance function] was more of record-keeper in a sense, but we’ve now successfully implemented a new financial reporting tool, making our ability to analyse financial information key to what we’re doing.”
Despite improving certain functions of the business, the company recently posted a 12.5% fall in adjusted profits over the past six months, a figure which Westenberger puts down to the cost of investments and recent turbulence in the market.
“The value of our income is linked to the value of our client portfolios, and the value of the portfolios move up and down in line with investment markets. Those markets peaked over a year ago,” he explains.
The company is now moving towards a much brighter future, adding a Cambridge office to its portfolio in February, as it begins to focus on attracting a much younger client base.
“The biggest challenge for us is that we’ve got very loyal, long-standing customers, so now we’re trying to capture the attention of young people who may not feel like we’re relevant to them at the moment,” says Westenberger.
One of his main aims is to try and blend “innovation with our tradition, the heritage, and our client services”, which he believes is a mix that can’t be found among the competition.
“That’s why firms such as Nutmeg and roboadvisors are fundamentally not succeeding,’ he says. “There isn’t a trust, firms take a long time to grow trust with their clients but we’ve done that already.
“We take the glass half-full approach. We analyse what we have and see how we can build on it, rather than focusing on what we don’t have.” ?
Andrew Westenberger CV
January 2013 – present Finance director, Brewin Dolphin
2009 – 2011 Group finance director, Evolution Group PLC and director of its principal subsidiary Williams de Broe Limited
2000 – 2008 Various senior finance and business management roles, Barclays Capital
1996 – 2000 Head of Product Control groups in London and New York, Deutsche Bank
1993 – 1996 Product controller, Interest Rate Derivatives, Bankers Trust
1987 – 1993 Chartered accountant, Coopers & Lybrand