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Towards the end of 2018, CdR Capital was at a crossroads. Named after the location of its first office in Cours de Rive, Geneva, the private investment office had grown swiftly since inception in 2012 to employ nearly 40 people across four countries. Yet, as its partners looked forward to the 2020s, they recognised the firm needed more scale.

By operating from Geneva, Dubai, London and Miami, CdR could give its global clients the global investment advice they required. But doing so brought complexity across all areas of the business, not least the task of complying with different regulations.

Consequently, CdR realised it needed to make a major investment in technology. “To meet both the client opportunities and regulatory complexities of the modern world, and to scale your business, you need to employ technology,” explained Steve Smith, one of CdR’s founding partners. “If you don’t standardise your processes and be thoughtful about technology you can’t scale. And, if you can’t scale in our judgement you can’t survive.”

Business Navigator’s audit
It was at that point that CdR struck up a conversation with Julius Baer’s intermediaries team, tasked with implementing the “Business Navigator” approach to helping external asset managers (EAMs) with business strategy and operational challenges. In line with the bank’s commitment to building strong partnerships with EAMs, the team approached CdR offering to perform review its website, technology systems and processes, seeking to judge if they were fit for the new decade.

What followed was a short assessment process during which CdR supplied key information, including number of clients, profitability per client and number of colleagues. At the end of this time, the Julius Baer team provided a series of recommendations, which CdR have largely followed, although in some areas they augmented them to fit their specific needs.

Turning first to the website, Julius Baer performed a top down competitor analysis coming to two principal conclusions. Firstly, that CdR’s propositions and calls to action should be better defined. Secondly, that clients needed to be able to access their data directly through the website, which required a separation of the underlying CdR asset management and wealth management businesses’ propositions.

“So, in other words the website becomes more than a sophisticated calling card,” says Smith. “It becomes the door to your shop.”

More importantly, the review confirmed for CdR that it needed to conduct a major upgrade of its systems and processes. As a result, it has embarked on a technology transformation project with four underlying parts: a portfolio management system (PMS), an interface system with custodian banks, a customer relationship management system and an intranet.

Even before the  assessment from Julius Baer’s intermediary team, CdR’s Global COO and Partner, Paul Feldman, had been seeking the advice of another area of Julius Baer about a new PMS. Covering everything from managing investments through to compliance reporting and management information, this system was key for scaling up the business. With the intermediary team now involved, the bank recommended a shortlist of specialist suppliers of leading wealth management systems.

“We were impressed with what we were shown,” noted Feldman. “And we realized that there wasn’t going to be one system that does everything, and we’d have to decide whether we were going to buy and then build a little bit onto it, or we were going to build ourselves. So that was kind of the main thing that I spent most of my time on post the discussions; on thinking about what do we need in Geneva to make this a scalable business, which is what we wanted to do.”

In terms of expanding the business, the PMS system selected had the benefit of allowing CdR easily to add new teams of private bankers joining the firm. The process of bringing their clients on board would be straightforward, as would setting up custodial links with the respective banks.

Scaling up for growth
There are plans to have all the new systems, including best-of-breed apps, in place by the end of 2019. Realistically, though, training staff to use the new technology will mean that they are not fully functional until several months into 2020. The website should be finished around the end of the first quarter of 2020, including the capability to have more engaging content. The intranet, too, will be rolled out in 2020, and will be deployed as a tool to improve employee engagement in what is becoming a larger and geographically diverse business.

Demand for independent wealth advice from boutiques like CdR is growing fast. Yet the barriers to entry are rising. To compete requires staffing the full range of client relationship, research, investment and support roles across several countries. Additionally, regulators demand independent control functions. That means firms need to invest in technology if they are to have the scale to capitalise on the opportunity to expand.

By following the “Business Navigator” approach, the intermediary team helped CdR to think through how to achieve this. In Smith’s view Julius Baer’s insights were invaluable. “They’ve been around for many hundreds of years longer than us,” he said. “They operate on a scale far bigger than us. And so, we were excited to learn from them about some of the strategic challenges and opportunities that they see in the 3,000 to 4,000 firms like us that operate in Switzerland.”

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