This publication recently caught up with Mark Kary, head of Rothschild's UK wealth management business. He heads a business with the priceless asset of a famous name but is taking nothing for granted.

It is sometimes remarked that in wealth management, firms must either choose to go for the big-is-beautiful model or the nimble-niche player option. The middle ground is seen at best as a messy compromise.

As far as Mark Kary, head of Rothschild’s UK wealth management business, is concerned, however, this choice is crude. In a world where clients want close relations with managers, independence of outlook, no “product push” and the muscle to be able to deliver services with flair and consistency, being some way between the two extremes makes sense. Rothschild focuses on a target market of those holding £30 million ($44.8 million) plus wealth in total (£5 million with Rothschild) and currently oversees more than £4 billion of client money.

“We are a global business, but we take a different approach to the bulge bracket investment banks,” he told WealthBriefing in a recent interview at his firm’s offices in the City. “The Rothschild model, if you go to the roots, is that it is an advisor, and not to be a seller of products. It is a very independent model.”

On the other hand, when looking at some of the boutique family office-style firms, they may not have sufficient resources to meet clients’ needs, Kary, who joined Rothschild in 2010 from Polar Capital (where he had been chief executive), said.

“I think the opportunity in the middle ground is actually expanding. People have lost some trust in the biggest houses. One reason for picking a firm is the longevity and stability of a house; it is incredibly powerful that Rothschild’s ownership is controlled by a family that founded this business, on this site, over 200 years ago. There are clients here who have been clients for many years so we are doing something right. There is also a huge alignment between the client and the shareholder,” he said.

“We do not try to be everything to every client. Instead, we focus on and invest in the areas which we believe we are genuinely skilled in and can delivery excellent results for our clients. This is primarily unbiased advice and asset management,” he said.

Despite all this talk of longevity and history, there is nothing smug or complacent about this firm, and certainly not about Kary, who right at the start of the interview pointed out that Rothschild had some work to do in getting up to speed to adjust to modern clients’ demands.

“Perhaps a few years ago it had under-invested in the business. That has changed very meaningfully,” he said. There has been a “multi-million” investment in a new operational platform including new integrated technology systems, as well as a number of senior hires. We now have a scalable platform to support future growth, he continued.

This investment must be seen against a backdrop of a radically changing wealth landscape.

“We should note the nature of wealth and that the type of wealthy person has changed dramatically in the last few years,” he said.

Today, only a single-digit percentage of those on The Sunday Times Rich List are old landed family members, he said. About 30 years ago, that would have been nearer to 30 per cent.

“Our recent recruitment efforts have reflected this…We are recruiting people better able to serve this entrepreneurial wealth,” Kary said.

There has been plenty of activity. In May, Rothschild appointed Charles Costa Duarte and Jake van Beever to its UK wealth management business, to create a new client advisor team, based in London. Both Duarte and van Beever joined from Lloyds TSB Private Bank, where they advised ultra high net worth clients. Last September, the firm appointed Gary Powell as group head of strategy and corporate development, switching from his previous role as head of the firm's UK wealth management division. In this role, he works with Nigel Higgins and Olivier Pecoux, chief executives of the Rothschild group. Powell has been at the firm since 1994, joining as an investment banker before moving to the wealth side in 2006. Kary, meanwhile, took up his current role in 2012, two years after joining.

The firm also recently picked up a WealthBriefing Award – at this publication’s European event in London – for best UK private bank, ultra high net worth team. The firm’s submission for the award, and the independence and depth of Rothschild’s offerings, impressed the judges greatly.

And so far the story has been one of steady, but not super-hot growth, which one suspects is how clients of this firm like it. It is now managing well in excess of £4 billion of client money, AuM having stood at about £2.5 billion three years ago.

“We are profitable…we are a firm more or less where we want to be in the cycle. The ambition here in the UK is to have £10-12 billion in AuM and may be a few more people than we have now. We have 90 wealth management professionals in London today…maybe we will go to over 110,” Kary continued.

Changing perceptions

It may be easy to have a set view of this blue-blooded firm; it seems to have been around since the very origins of London’s financial market, and yet it is easy to forget the entrepreneurial origins and daring of the original founders of this business. That spirit of enterprise is something Kary likes to remind people of.

“There has been some misperception about Rothschild. Some 100 per cent of business we have taken on over the past three years is first generation wealth,” he said.

“Most of our clients are entrepreneurs and large families who have worked hard to build their wealth – they are not looking to us to create a second fortune. For that reason, our starting point is preserving wealth in real terms, in other words keeping ahead of inflation.  Wealth preservation is a key part of our heritage and what we do best.”

“The family is now in its seventh generation and now moving to the eighth. They are able to preserve wealth because they are entrepreneurial,” he continued.

“This [Rothschild headquarters] building is fantastic in that this is the building the family intends to base its business in for the next 50 years. The public spaces are great and the work spaces are extremely functional,” Kary said.

The building is certainly impressive: the 90 or so wealth management professionals are included in a firm with a headcount totalling around 800 people.

A peerless network

It is sometimes easy for even a fairly experienced observer of the financial scene to get lost in the complex web of family lines and business relationships that make up the Rothschilds (both on the British and French sides.) There are four main business lines: wealth management, global financial advisory (the firm’s investment banking business), institutional asset management and merchant banking (a private debt operation).

Rothschild’s Wealth Management & Trust business is part of the Rothschild Group, which has approximately 2,800 people in 40 countries around the world with its Paris and London offices, comprising Global Financial Advisory (its investment banking business), institutional asset management, merchant banking and wealth management & trust. (The Rothschild Group is headquartered in London and Paris, but has offices in and operates in many countries.) Additionally, all branches of the Rothschild family have connections to the wine of their name. Rothschild Wealth Management & Trust’s chairman in Baron Eric de Rothschild, who runs Chateau Lafite.

And that is not all. Jacob Rothschild – founder of St James’ Place, now heads up RIT Capital Partners with Nathan Rothschild. There is also the Banque Privee Edmond de Rothschild firm in Geneva. It is quite some network even though, like all big dynasties, there can be fallings out.

And while the surname is a priceless name in this business, Kary argues that Rothschild’s wealth management brand is still not as well known as it could be. But given the rate of progress even in the relatively short period that Kary and his colleagues have been at the helm, that is unlikely to be an issue for long.