Rathbones’ chief operating officer Andy Brodie, who spent 10 years in the British Army, faces many challenges involving trust, technology and team-building in the high-profile merger with Investec.
Andy Brodie, chief operating officer at fast-expanding London-based wealth manager Rathbones, gazes wistfully from his office window at the City’s sleepy Finsbury Circus.
He won’t be enjoying the view much longer, as his firm is about to move into the more spacious offices of Investec in bustling Gresham Street, close to St Paul’s Cathedral.
The merger with Investec Wealth & Investment – in which Rathbones is the larger, better-resourced partner – is a major event in London’s wealth management ecosystem, for which Mr Brodie, as chief operating officer, has been preparing for some time. The focus has been on creating efficiency, reducing costs and building scale.
Military background
He joined Rathbones in 2020, just as the Covid-19 pandemic was beginning to bite, but his inscrutable expression is that of a man who has faced much more challenging situations in his career.
Soon after graduating, he joined the British Army, and served in two high-risk locations – Iraq and Northern Ireland – where data had to be processed instantly to make life-or-death decisions. He ended up serving for a 10-year spell.
“What I learned a lot about in the army was leadership and teamwork,” says the casually dressed but steely-eyed Mr Brodie, whose newly merged firm now manages client assets of £105bn ($133bn).
“And as you know, in the commercial world, leadership and teamwork are absolutely critical. Although the army from outside looks like a very hierarchical organisation, it actually engenders teamwork, empowers decision making, delegation, working together and solving problems,” he recalls.
“I’ve taken those skills from the military and they have ran through all the jobs I have held since,” he says, with a nod to his time at BSkyB, O2 Telefonica, Barclays Wealth and Standard Life Wealth.
“Here at Rathbones, something we really focus on is teamwork, leadership and helping employees drive innovation right across the organisation.”
As well as “learning how to make decisions in pressurised environments”, his front-line experience taught him how to build a rapport with communities who were not necessarily welcoming to their military visitors. He feels this will come in handy when it comes to bringing two teams together and convincing clients to stick with the new project.
“Trust doesn’t just happen overnight,” reflects Mr Brodie, educated at the University of Surrey in the early 1990s, later moving to Edinburgh to study for an MBA. These days he still splits his time between the Scottish capital and south London, equally at home in both.
“You need to build trust through a team ethos,” he says, discussing the challenge of bringing together two teams who do not know each other and how to build a new, combined ethos required for an integrated firm.
Previous mergers
Mr Brodie recalls previous mergers he was involved in, including the acquisition of Newton’s private clients division, while serving as head of operations at Standard Life Wealth. “What I learned from that was the real importance of the cultures of the two organisations and the integration of the culture, the people, the way the organisations worked. This was just as important as the technology solutions that were provided to the organisation.”
His office walls also offer something of a dichotomy. One modernist painting presents a cubic interpretation of the Jurrassic Coast in Dorset. Another is an imaginary combination of the firm’s 23 regional offices, including Leeds, Liverpool, Birmingham and Belfast, grouped around a fantasy marina. The Glasgow, Edinburgh and Exeter offices have already been integrated.
“In our operations centre in Liverpool we have people that know each other because it’s a small city and they have family and friends who have worked for both organisations,” he explains.
“But at a macro level, every individual from across the organisation is coming together to meet their peers and the teams are getting to know each other,” he says, with glasses clinking and chatter building outside in the foyer as the latest gathering picks up pace.
So far, it seems the technology challenge might be slightly steeper than the one around combining teams, with Mr Brodie describing a “natural cultural fit” and a “huge amount of investment in our business applications”, which both firms have made during the last three years.
From the Rathbones’ perspective, this has involved partnerships with software providers InvestCloud, Objectway and Charles River. “Investec have been looking to embark on a similar investment journey as they move forward,” says Mr Brodie. “And so they looked in on our business and saw a great opportunity to leverage that work we’ve done.”
In turn, Rathbones looked at the progress Investec had been making in upgrading technology infrastructure and cloud computing relationships with Microsoft.
Retiring tech systems
But there will be no room for sentimentality, with Mr Brodie at the helm of operations.
“On the UK investor side, as we bring their clients onto our systems essentially, clearly we will be retiring some of their systems and applications within the Rathbones business,” he says.
“We’re continuing to evolve those systems that we’ve been building on over the last few years.”
One blow to some UK customers – used to the iconic zebra brand of Investec – will be the end of this long-term brand identification, now that the UK firm is splitting from its South African parent group.
“Rathbones will be concentrating on our own brand, which is a very well-recognised one in the UK wealth management market,” says Mr Brodie, whose combined firm now boasts 608 investment managers and 117 financial planners.
“We’re very much about responsible investing, which is ultimately what we’re here to do. We want to do the right thing for our people and our clients and ultimately offer client choice.”
Rathbones will now be serving 114,000 clients across all of its regional offices, with a realisation that further mergers might be expected in the UK industry, as providers look to build scale.
“Scale has been very important for us,” he says. “We have focused on it, we felt it’s an important part of our strategy. But we also know there are some really good boutique wealth managers across the UK serving their clients really well. So I think we will continue to see a blend of players in the industry.”
Human and digital blend
The other blend he expects to continue to develop is one between human and tech-enhanced wealth management.
“We believe very strongly that it is a relationship-driven business and that relationship between the human, the client and the investment manager is so critical. Where we see technology and AI coming into play is to help the investment manager help the client, depending on what they wish to do.”
Although he is steeped in the traditions of UK wealth management, Mr Brodie has regular meetings with firms much further afield to stay in touch with international developments, recognising that most UK clients also have global business or investment interests.
He has just returned from a course in California’s Silicon Valley. “I was exposed to a number of start-ups, fintechs and entrepreneurs, who are thinking about innovation and how to solve problems in the world and it was fascinating. We talked about the future of travel, the future of space and the future of food and what sort of role AI would play in this across the globe,” he says.
Innovation, believes Mr Brodie, must come not only from the narrower perspectives of London or Edinburgh, but from a much broader, global ecosystem.
