Blog: Robin McAdam reflects on Scotland’s Financial Services sector

As investment managers Brooks Macdonald celebrate 25 years in business with a corporate relaunch, Scottish Financial News caught up with head of the Edinburgh office, Robin McAdam.

Robin and his colleagues, Alistair Wilson and Gareth Howlett, were executive directors at RBS-owned Adam & Company Investment Management. In 2009, while looking for a fresh challenge, they had heard Brooks Macdonald was thinking about opening an office in Scotland, as they were already doing business here. So the trio made an approach – ‘how about opening up with a ready-made team?’

The marriage between that team with their skills, contacts and experience, and the others that eventually joined them, along with a business that was going places, investing in its own growth and focused on being a pure investment management business, has ensured that Brooks Macdonald has gone from strength to strength since.

Robin explained: “We wanted to stay in Scotland, but we wanted to work in a more strategic environment. That Brooks Macdonald was in the market for a team, and that it already had a growing regional network, just made our ambition all the more focused. Along the way, other like-minded contacts have joined us – fostering a ‘family business’ environment, which we see as an asset, as we are still in the relationship business. The firm’s dynamic strategy and investment approach means that we, and our clients, appreciate and benefit from the whole package.”

He sees increased regulation post-2008 as critical to retaining and building trust: “We are all operating in a more heavily regulated environment, and I support the principles behind that. The industry as a whole has a job to do to retain trust – from clients and intermediaries as well as the general public, and that remains a key challenge. For all the increasing regulation, as far as the investor is concerned, the UK is a good place to be – the level of transparency and protection is as never before.”

But Robin added. “The key to regulation, beyond establishing genuine need and measurable benefit, is smooth implementation. For example, the building blocks are in place for Mifid 2, but the changing goalposts when it comes to implementation has presented an unexpected challenge for the industry.”

“The investment landscape is more challenging post the 2008 financial crisis. Clients do understand growth is low overall, and it’s our job to make sure that they understand and accept the limitations of the environment into which they are investing.”

Scotland’s canniness with money was legendary around the globe and, although slightly tarnished in recent years, Robin is adamant that Scotland has great expertise in Financial Services to share with the world.

He said: “We’ve all heard the jokes about canny Scots being good savers – and some might believe we all have our mattresses stuffed with cash – but it’s not true any longer. At least I hope it’s not…there are still much better returns to be had than the ‘stash the cash’ strategy!”

“What is marking Scotland out now is the level of talent in financial services. So we’re less famous for penny pinching and more often recognised, on a global level, as having a strong pool of talent in investment and FS. That does mean Scotland is competing with glamorous locations across the globe to keep our talent on home shores, but it also means that some of the world’s largest FS businesses want to be based here to utilise that talent. It’s a good position for Scotland to be in, and helps the wider market here. “

And he believes that Brooks Macdonald has something special to add to that pool of talent: “What sets Brooks Macdonald apart is that we work as a supportive partner of financial advisers – who after all, bring us 88% of our business. When they bring us a client, we work with them to make sure their client is looked after, and that our activity reflects well on the IFA that involved us. “

“Our strong focus on being the leading investment manager for professional advisers means that we take particular care of the relationships we have, and continuously strive to make them better. Our belief in the clear model of good advice and discretionary fund management is at the forefront of all our activity – which is why our restructure and rebrand is so fundamental to our business. We are Brooks Macdonald, and we are, at core, investment managers – you can’t get much clearer than that.”

Brooks Macdonald revealed today that it has reached £8bn in assets under management for the first time, despite recording investment losses for the quarter.

The results for the three months to the end of March, released today, show assets rose from £7.8bn at the end of last year.