Carrick Wealth

C A R R I C K W E A LT H

CARRICK WEALTH

Carrick Wealth

Changing Industry Perceptions Across Africa PRODUCTION: Manelesi Dumasi

Cape Town-based Carrick Wealth provides integrated wealth management services to clients big and small, all over Africa. The company has grown significantly in its four years and is changing perceptions in the industry thanks to a concentrated effort to put the client first. Founder and Group Chief Executive, Craig Featherby talks to Enterprise Africa about the company’s success.

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With a struggling economy set to make life difficult for many South Africans for the next year at least, now is the time for people to seek financial advice to help avoid the temptation of turning to debt or raiding the savings.

However, according to the 2017 Old Mutual Savings & Investment Monitor, only 13% of employed South Africans who live in the country’s big metros have a relationship with a financial adviser.

For Craig Featherby, who founded Carrick Wealth – a boutique integrated wealth management business – in 2014, this is simply unacceptable. His view is that everyone can benefit from the advice and education that a competent financial planner can give. Whether you are well-versed in personal finance or if you’ve never spoken to a financial adviser

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in your life, you can definitely benefit from a carefully crafted financial plan.

“A lot of people choose not to seek advice because it can be too overwhelming,” says Featherby. “Financial planning, and being disciplined enough to stick to that plan, can be an overwhelming concept and we find that people are often doing nothing. That is why we actively try and speak to as many clients as possible and educate them on starting a plan. The most important thing is to start – open a bank account, start by saving R1000 a month – just start,” he says.

He details how the market for financial advisers in South Africa is large, with an oversupply of clients and a shortage of suitably qualified advisers. Of the 52 million people in the country, he claims around 25 million could potentially utilise the services

of a sound financial planner but there are less than 100,000 registered planners active right now, according to the Financial Services Conduct Authority (FSCA).

“We believe that everybody needs a plan, and everybody needs advice to help them provide for their future,” he says.

“Unfortunately, our government and our government’s reserves cannot support people in retirement. Your average state pension is R1600 per month so if you don’t start doing something about it yourself, you’re going to end up in hot water and likely be financially destitute.”

Growing from nothing to have offices all over southern Africa in just four years, Carrick Wealth’s reach is wide, and Featherby wants to change perceptions of financial advisers across the region to encourage more people to make use of

Craig Featherby – Founder & Group Chief Executive at Carrick Wealth

INDUSTRY FOCUS: FINANCE

what can be a valuable service.

“The industry at large doesn’t have a good name. In the past, it has been geared towards high commission and what is good for the adviser, not what is good for the client. Financial advisers have become product sales people rather than advisers and that causes some people to naturally fear the industry. We find that around one in three of our clients have been ‘burnt’ in the past, where they have been put into investments that were not suitable, resulting in them losing money. That contributes to people trying to do things on their own or not doing anything at all.”

Ideally, Craig Featherby likes to sit with clients and discuss a plan. “It is a belly to belly business. We like to deal face to face,” he says. He wants every employee in the business to talk to clients and potential clients to ensure they know Carrick Wealth is an independent business, putting the needs of the client before anything else.

“One of our objectives is to create a truly intimate relationship with our clients.”

An ideal situation for Featherby is when someone walks into a Carrick Wealth office, who has never before employed the services of a financial adviser, with a goal to achieve.

“If someone walks into my office and says they want to start, it would be music to my ears as it would be the beginning of a long-term financial marriage,” he says.

“When you start seeing people progress and when their assets start growing, that

// WHEN THE REST OF THE WORLD WAKES UP AND REALISES THAT THE OPPORTUNITIES ARE NOT NECESSARILY IN THE FAR EAST ANYMORE AND THEY START MIGRATING TOWARDS AFRICA, WE WILL ALREADY BE ESTABLISHED // 4 / www.enterprise-africa.net

is what it’s all about. Very soon, with the growth of Carrick, we will start to see our clients achieve their goals and I don’t think there is anything more rewarding than partnering with a client and seeing them achieve those visions – especially when they come back and say ‘thank you, without your help we would not have been able to send our children to university’. It all comes through education and planning.”

In 2017, the Financial Planning Institute of Southern Africa undertook a study which found that 70% of South Africans don’t know who to trust when it comes to financial planning. Carrick Wealth’s core values are about reversing this worrying trend and creating a reputation of excellence.

“We like to think we change the lives of families and not just individuals. If you are the breadwinner and you have a successful financial plan, you can change the lives of your entire family.”

WEALTHY AFRICA Carrick Wealth has grown significantly since its establishment in 2014 and the plan for the future is to continue growing with an aggressive strategy across southern Africa and, eventually, east Africa. Currently, the business is active across South Africa, and has operations in Botswana, Malawi, Mauritius, Zimbabwe.

Africa’s total economy contributes an estimated $3.52 trillion to global GDP and many business commentators have labelled the continent ‘the future economic growth engine of the world’. Sub-Saharan Africa, in particular, is exciting with many countries posting strong economic growth figures and development projects expected to continue in a big way.

Featherby says that gaining first-mover advantage is the driver behind his ambitious African growth plan, and it’s so far so good.

“Africa is where the Far East was 25 years ago,” he enthuses. “The next big thing is going to be Africa. If you look at our operation in Malawi, there is not another single service provider that does what Carrick does registered with the reserve bank. That means the opportunity that awaits us there is enormous as there is no

// ONE OF OUR OBJECTIVES IS TO CREATE A TRULY INTIMATE RELATIONSHIP WITH OUR CLIENTS // competition. That is what we find in the likes of Kenya where there are 12 registered companies in the whole country. It’s a massive market with a growing population and a very young population, and if there are only 12 companies that do what we do, there is an immense opportunity.

Our objective is to be the first mover in these markets across Africa. When the rest of the world wakes up and realises that the opportunities are not necessarily in the Far East anymore and they start migrating towards Africa, we will already be established and we will already be representing clients. It’s about dominating the market before too many entrants get into the market.”

Featherby, originally from Zimbabwe but who grew up in Australia and KwaZuluNatal, states that he has always been keen on the continental market after many years of exposure to different geographies with a previous employer.

“The plan was always to expand into Africa, we have some massive expansion plans because the continent is just such a big place. With 54 countries and a population of 1.1 billion people (set to double by 2050), there is such a major opportunity in Africa and we want to take advantage of that.

“Our initial expansion was southern Africa – South Africa, Botswana, Zimbabwe, Malawi – we still need to look at Mozambique and Namibia, but we are now wanting to get our footprint in East Africa.

We are starting with Kenya and the next will be Tanzania followed by Rwanda, Uganda and eventually Ethiopia. That is our target for the next 18-months.

“We are still focussed on our core which is South Africa, but our attention will certainly be on East Africa over the next 18 months.”

CARRICK WEALTH

OFFSHORE EXPOSURE Apart from remaining completely independent, another string in the Carrick bow is its ability to offer offshore investment opportunities. This is, essentially, taking money out of South Africa and exposing that money to opportunities in other countries, helping to spread risk.

In September, it was announced that South Africa entered technical recession with GDP contracting by 0.7% in the second quarter of 2018. You might think that this news would be extremely worrying for Carrick Wealth, considering technical recession often hits the pockets of consumers hard. But Featherby says that he sees opportunities where others get lost in negativity.

“All of those negative political and economic statistics actually bode well for us in that people lose confidence in the

economy and therefore look to externalise more funds out of South Africa,” he says.

“We started with offshore investing, externalising and investing in South Africa, and safe jurisdictions outside of South Africa. We realised that clients still had large sums of Rand to invest locally so we developed the concept of integrated financial planning which means our team here can sit down with any client and assist them with all aspects of financial planning.

Whether it is long-term retirement planning through to short-term aggressive investment structures on to insurance and protecting the client’s assets and the whole fiduciary space where we advise on trusts and estate planning.”

An important element in the company’s offshoring strategy is its office in Mauritius. Recently established to provide global financial advisory services to clients from across the world, the office

is completely based on technology and represents Carrick’s maiden venture in the world of virtual services.

“Initially, I was against the idea because it’s all done virtually,” says Featherby. “It’s not robo-advice but everything is done through technology.

We don’t have meeting rooms, we have studios with cameras and our team can log in and advise a client in China on financial planning or pensions. We never meet the clients, and when it’s time to complete paperwork we deliver the documents ‘door-to-door’. The first 18-months were very slow as we established the idea. This year, the formula has fallen into place. We have 18 advisers in Mauritius and a large portion of our growth is because that operation is successful.”

Through this office in Mauritius, and across its network of offices in southern Africa, Carrick Wealth utilises

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INDUSTRY FOCUS: FINANCE

the best institutions, best products, and its abundance of industry knowledge to help clients truly globalise their investment portfolio and make the most of their money.

Partnerships with the likes of MitonOptimal and Capital International Group back up the global credentials of Carrick Wealth with both companies brining a tailor-made range of investment services.

This is a business which truly has the continent at its feet. But it hasn’t always been easy. The complicated history of the company saw it almost begin life without a name. Subsequently, the Carrick name means more than was ever intended.

RICH HISTORY In 2013, Craig Featherby was working for the large global brokerage. After a

decade with the business he found himself growing uncomfortable with the way the company was moving.

“The interests of the organisation were being put ahead of the interest of the client in a quickly changing market. The market in SA and Africa needed a firm that truly put the interests of the client first.

“It was a big decision, after 10 years in various senior roles, to make the leap,” he remembers.

The push he needed came while he spent time in hospital recovering after serious surgery.

“I ended up tearing ligaments and having to go for a knee operation.

Subsequently, I had clots go through my heart and I was in intensive care for 12 days. That gave me a lot of time to think

and I realised that my exciting chapter was coming to an end and it was time to do something new,” he says.

At this point, he still did not know he would start Carrick. He just knew his time with his former employer was up and, in April 2014, he resigned without a set-up prepared for the future. Interestingly, Featherby was spurred into action quickly after his resignation as, when he left, 48 of his colleagues also resigned.

“The idea, then, was to start a small boutique investment management firm but after my resignation, 48 other people in group resigned to come and join me. That gave me a predicament because I didn’t have a business, we didn’t have a name, we didn’t have an idea apart from the fact we wanted to be small – but from day one

Capital International Group (CIG) - Proudly Shaping African Financial Futures: Capital International Group (CIG), founded over 20 years ago, is headquartered in the Isle of Man and has a proven record of accomplishment in providing expert offshore financial solutions and services.

The company focusses on three key areas of service: Platform, Investment, Treasury.

In 2014 CIG opened its first office in Southern Africa, namely in Cape Town, to offer its innovative platform services to the Intermediary market in South Africa. CIG operates both a Cat1 and Cat2 FSP under South Africa’s regulations.

CIGs brand and proposition has quickly resonated in the marketplace to become one of the leading open platforms that advisers and wealth managers gravitate to for offshore investments solutions.

CIG is particularly delighted to be working with Carrick Wealth, whereby the Group aims to deliver an efficient and effective investment solution to their clients. Carrick Wealth is attracted to a number of features including CIG’s open architecture platform, a solution that enables investment into any funds, listed assets, or structured products as well as to appoint a suitable DFM. In addition to this, all client assets and data is held on the Isle of Man, giving clients like Carrick Wealth true offshore protection. At the same time, our Cape Town office provides local support, onboarding and query resolution; thereby greatly enhancing the client and service experience for Carrick Wealth and its clients.

CIG’s ambition for African expansion now extends beyond Cape Town and the company is set to open offices in Johannesburg in January 2019. This office will service existing intermediaries in the region but will also enable CIG to better serve clients in Mauritius and across the African continent.

“We recognise that clients throughout Africa are looking to build a wealth portfolio offshore, in a stable jurisdiction, that can provide them with a wide range of investment options in a range of hard currencies,” says Greg Ellison, CIG CEO. “However, these clients are often based in remote locations and travel frequently. Accordingly, they demand superior online reporting and onboarding solutions. These clients also expect their assets to be held in a secure and well-regulated environment. CIG is keen to assist these clients and to work with their intermediaries and advisers to deliver a compelling solution.”

Information in this material does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security.

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// WE ARE STARTING WITH KENYA AND THE NEXT WILL BE TANZANIA FOLLOWED

BY RWANDA, UGANDA AND EVENTUALLY ETHIOPIA. THAT IS OUR TARGET FOR THE NEXT 18-MONTHS // we had just under 50 people. It was an extremely tough time.”

Common sense tells you that building an office, creating a brand, growing a client base and satisfying the income requirements of 48 professionals is no easy feat – “It was extremely challenging,” says Featherby.

But the business was licensed in October 2014 and the final hurdle, apart from actually running the company, was settling on a name. It had to be strong,

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memorable, meaningful and represent consistency and quality. But after lengthy consultation, the perfect name remained elusive.

“I sat with the other founding members and we wrote down pages and pages of names and we tried to whittle it down only to find out the names were taken. My wife started researching famous race horses before looking at famous boats and ships.”

She found a story about the Carrick, a clipper ship built in Sunderland, England, launched in 1864, which had served as part of the Royal Navy. In the 23 years after launching, the Carrick conducted 23 successful return voyages from London to Adelaide in South Australia, becoming known for speed and reliability. After 1887, the shop was used to carry coal, timber, and many other goods around Britain and across the Atlantic, always completing journeys without hassle.

“The moment she said Carrick, something rang right with me. The other guys agreed and Carrick was born,” says Featherby.

But the name Carrick is more than a symbol of success and reliability. Its connection to the business, previously unknown, was discovered six months after the business was registered as Carrick Wealth.

“We found out, completely by chance, that Carrick in Gaelic means Craig,” explains Featherby.

SERVICE PEOPLE Like most businesses, Carrick prides itself on the calibre of people it has managed to attract. The company is now home to more than 200 people and this will grow as the African expansion strategy gains traction.

“We started with myself and three other members - Mike Fannin, Mike Potts, and Kieron McRae. We started in a tiny rented office for the first four months and we grew from there.

“It’s been fun and that has been the most important thing. We have learnt a lot about business and a lot about people. At the forefront of our philosophy is putting the client first. It’s not about a product, it’s about the client’s

CARRICK WEALTH

goals and dreams,” says Featherby.

All of the company’s advisers are licensed with the Financial Services Conduct Authority or applicable regulatory body, and all are well-versed in the company ethos – the client comes first.

This has helped Carrick to, not only achieve its goals, but exceed them. The pipeline for future talent is strong with Carrick developing from within and investing heavily in the upskilling of future industry leaders.

“We have a fantastic development academy through which we brought 24 graduates this year. Training them and seeing them go into the offices is what I really enjoy, and if we do it well, we are going to be able to expand the operation aggressively.”

And aggressive expansion is not just a saying at Carrick. It has been demonstrated

over the past four years and is showing no signs of slowing.

“We currently manage just over $400 million so we are on track for growth of $100 million per year but that is increasing quite dramatically. The management team recently gave me the Q3 report and we have done exceptionally well compared to last year, we are 53% up compared to the same period,” details Featherby.

The leadership has set a long-term goal of attracting $1.5 billion under management, but after the start to its life, the company is already looking beyond this milestone. “Will we stop there? No,” says Featherby.

But rather than talk about the money his business manages, Featherby reminds that the company was established to help as many people as possible while always remaining independent. His goals will be

achieved when he starts to see existing clients achieving their targets and potential clients starting to adopt a plan.

“It’s not about the money, it’s more about the clients. I’d rather talk about having 100,000 clients over having so many million under management.”

Right now, the focus for Carrick is bringing on board new people to help propel it further across Africa, and if everything plays out like Featherby hopes, his business could become one of the continent’s leading financial adviser and wealth management organisations. Carrick and Craig are full of life and are very much open to helping clients grow, protect and preserve their wealth.

WWW.CARRICK-WEALTH.COM

“I grew up on an Aberdeen Angus stud farm in KwaZulu-Natal.

As I was growing up, I always told my father I wanted to be a farmer. That was always my goal. My father didn’t share my vision and he convinced me to go to university.

“Thereafter, I lost the desire to farm and decided to go into the corporate world. I worked for ABSA Bank for four and half years in KZN, providing listed companies with investment banking services. At the age of 25, I applied for a position at PIC, which is now owned by international investment company, deVere, and I worked in the Middle East for PIC for three and a half years. I then transferred into the deVere group and worked across Asia for five years.

“After returning to South Africa, and after spending years living in very busy cities, we decide against Johannesburg and made the choice to settle in Cape Town’s southern suburbs while establishing Carrick.

“I’ve always been in some form of banking advisory role and I’ve always had fun doing it. Perhaps my next chapter is to try and become a farmer once again.”

CRAIG FEATHERBY – FOUNDER & GROUP CHIEF EXECUTIVE AT CARRICK

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ENTERPRISE AFRICA

NOVEMBER 2018