O-IM co-founders Lewis Hamm and Carl Stelfox
They say the best ideas are born of frustration – and this may be the case with O-IM, a new investment management firm founded by two former JP Morgan executives, fed up with the service they receive from their own providers.
The premise behind the business, co-founders Lewis Hamm and Carl Stelfox tell thewealthnet, is that affluent and high-net worth clients are generally poorly served by private banks who present them with confusing fee structures, aggressive cross-selling, sub-par technology, and high client-to-adviser ratios.
Chief executive and chief investment officer Mr Hamm, who became one of JP Morgan Private Bank’s youngest-ever executive directors aged 28, said he and Mr Stelfox had long-discussed becoming entrepreneurs.
And while many craved stability and job security during the pandemic, the pair viewed the period of change as an optimal moment to try and disrupt the sector.
“For the £250,000 to £5 million-investable assets person, service levels have really not adapted with the times,” Mr Hamm says.
“If you overlay Covid onto that perception that the [wealth management] industry isn’t changing quickly enough, we started looking at the major pain points: Firms don't necessarily have convenient onboarding, personalised service, and solutions tend to put clients down a rabbit hole, but without much customisation – whereas the rest of the world is going in the opposite direction.”
The real catalyst came via various gripes the pair were having with their own providers.
“We complained about it and said, OK maybe now's the time to try and see if we can actively disrupt an industry that we know we feel passionate about,” says Mr Hamm.
Primarily based near Bournemouth, but with a London office too, O-IM will look to provide “private bank-like” personalised service and bespoke portfolios.
The goal is to marry the benefits of traditional wealth management – robust risk management, human expertise and relationships, and a focus on clients’ specific goals – with the convenience of a user-friendly digital offering.
O-IM will also offer discretionary fund management services for professional advisers through a series of seven risk rated model portfolios, which will include direct equity exposure for more risk-on clients. Additionally, the firm will offer three sustainable model portfolios: An impact theme, a negative screening option, and a fund-of-funds.
However single stock picking will be a key focus, and the firm’s initial hiring reflects this, with two of its six-strong team being investment analysts: Anna Shyshova, previously a fixed income derivatives trader at Tradelink Holdings; and George Bennett, whose career includes roles at HSBC and within Rathbones’ private client division.
The firm received an “overwhelming” 300-plus applications for the first two analyst roles it advertised, and Mr Stelfox, chief risk and compliance officer, puts this down to shifting work patterns and priorities.
“The pandemic has undoubtedly demonstrated that you do not need to be in the centre of London or a major city to run a business. However, working from home isn't for everybody so we do offer that flexibility,” he says.
“I think that has been a draw to people, plus [the fact that] Bournemouth is a lovely, lovely part of the country.”
Earlier this month O-IM recruited investment manager Matthew Hull, previously co-manager of the TAMAC Global Managers Fund and an investment manager at Raymond James.
“We’ll continue to grow the investment manager side,” Mr Hamm says.
“As an industry, an adviser usually had between 300 to 500 clients. We want to keep it sub-100 so our advisers have time and focus for each client. As we get more clients, we’re going to stand hard on that threshold.”
Mr Stelfox previously held several leadership roles in risk management and compliance at JP Morgan, across wealth management, commercial banking and investor services. But his other main area of interest is technology – and how user experience can be improved without losing the “personal” feeling.
“We spent a lot of time brainstorming around the client experience. We were asking ourselves how we would want to be served – all the way from initial onboarding through to the marketing used,” Mr Stelfox says.
“It’s been a fun experience and nice to have been able to build something bespoke, rather than just taking a piece of technology off the shelf.”
All this consideration has resulted in a fully-automated and digital onboarding process – essential in the Covid-19 era – and a series of other intuitive features within the client portal, like an overnight feed on holdings, integrated calendars, and a chat functionality connecting clients to their adviser.
Fees are calculated on a tiered basis, with clients paying a maximum ongoing charge of 2.1 percent which covers all custody, advice, and fund charges.
“Again, another thing the industry has not done a great job on is fee transparency,” Mr Hamm says.
“[Our fee] is transparent, it's honest and it's also all-encompassing so there's not these little add-ons that people might not even recognise they are paying. Actually that becomes really hurtful to performance because they think they're paying 1.5 percent when in fact they’re paying closer to 3.5 percent.”
O-IM officially launches to the market today (7 September). It was first authorised by the Financial Conduct Authority in August.
