The Interview: Tom Wiseman

Written by: Jon Watkins Posted: 16/06/2022

BL78_TomWiseman1As the chief executive of Enhance Group, the fintech-based investment monitoring and advisory boutique for fiduciaries, family offices and charities, Tom Wiseman has a clear view of the emerging trends across both the technology and financial services sectors. He tells us how tech is powering the business to further growth and his expectations for the future of financial services

Tell us about your background and your early career.

I’m not from the Channel Islands originally. I was born and raised in Winchester before going to university in Sheffield, where I studied law.

I undertook that course because I wasn’t really sure what I wanted to do and I thought that, with a generalist academic subject at a red brick university, I could go and enjoy myself and work out what I wanted to do afterwards.
 
Shortly after finishing my degree I joined the graduate scheme at UK-based stockbrokerage Charles Stanley. There, I spent the first couple of years on a rotational scheme working across different departments in, ultimately, a very substantial wealth management and stockbroking business. 

I enjoyed it, but I felt at that time – and this has very much changed now in that business – that it was a fairly old-fashioned way of going about managing money. 

So I jumped off the graduate scheme there and I joined a business called Seven Investment Management (7IM), based in London.

What I liked about 7IM was that it was very small at the time – 25 to 30 people when I joined in 2009 – and it was fairly innovative and unconventional in that it blended together technology and investment management. 

The business had – and still has – its own intermediary platform that enabled third parties to run their own portfolios and IFAs to invest their clients’ monies. I thought that was an incredibly interesting, powerful way to distribute an investment service. 

I was on the investment management side, but so much of our distribution came through a platform, came through technology. And what really spoke to me was the way in which technology was integrated with third parties, in particular IFA software. 

The concept of looking after an IFA in Scotland that could open up an account and invest money with me, almost at the touch of a button, through slick, straight-through processing was, I thought, remarkable.

That was the first time I guess I really saw the potential and excitement of technology – of fintech – and I stayed there for about seven years until the business was sold to Caledonia Investment Trust.
 
How did the move to Enhance Group materialise?

As an investment manager at 7IM, I had been working very closely with investment consultants, including Enhance, running portfolios for investment consultants and their clients.

And what I really liked about investment consultancy and investment oversight more generally was the pure independence of it all. 

I always felt that it was a great position to be in – an investment consultant can choose any investment solution on the market for their clients, accessing best-of-breed opportunities and a range of investment philosophies. That was naturally intellectually interesting.

And, when I was leaving 7IM, an opportunity arose to join Enhance. So I took on a role that was initially focused on setting up a regulated business in London, providing investment consultancy – manager selection and strategic advice to ultra-high-net-worth individuals and family offices.

So, at the end of 2015, I established what Enhance now calls ‘Consultancy’, with my colleague Dr Ruzhen Li, who heads up that particular service line.

How did that role lead you to the Channel Islands?

We started building up the practice in London and we were gaining quite a lot of momentum.

But what we found was that most of the clients that we were interacting with – by nature of the fact that they were family offices or UHNW individuals – tended to have their investments offshore, as per Enhance’s core business.

We were increasingly being asked whether we could contract out of Jersey as opposed to London, so it made sense for us to consolidate what we were doing in Jersey. 

I moved over to Jersey in the second half of 2017 and, when I did so, I invested in the business and took on the CEO role and mobilised additional private equity investment.

It’s a minority stake, but we are 38% owned by the Financial Services Opportunities Investment Fund, which is listed on TISE – that’s the same fund that invests in PraxisIFM and Oak Trust company.

How has the business evolved since then?

What we’ve been doing over the nearly five years since is looking at Enhance’s business, refocusing it to being purely an investment oversight services provider to the fiduciary space. 

The nature of the business has gone from being purely people and service-led – of course, we still have good people and we’re still very hot on client service – to everything that we do being underpinned by proprietary technology that we have built on-island. 

When I looked at the business, I saw that Enhance as a group was doing quite a lot of different things back in 2017. It had a treasury function, it had an indexing business, it had an IFA arm – and my view was that there was the risk of becoming a Jack of all trades and master of none. 

As a relatively small company, you can’t do everything well – so I decided it was better to think what the core of what we do is and what the market requires. 

And there’s quite clearly a shift in regulation in the fiduciary space, whereby fiduciaries are under increasing pressure or obligation to evidence that they are appropriately investing and reviewing their clients’ monies.

That goes one of two ways. They either hire a team internally – and there are some benefits and there are some challenges associated with doing that – or they go to an outsource provider, which is where a company like Enhance comes in. 

So what we’ve been doing slowly but surely is refining the proposition down to three core service lines. On the website now, you’ll see just three services – monitoring, portfolio and consultancy.

BL78_TomWiseman2Can you talk us through those three core services – and how they work?

We typically provide investment monitoring, which is a low-cost independent review of investment assets to a trust company en masse. 

An example of a client is JTC. We monitor all of JTC’s wealth portfolios across all of its offices. So, essentially, they’re coming to us to get an independent sense-check on whether or not the third parties that their trustees have selected to run their clients’ money are doing what they’re supposed to be doing. 

We provide them with independent reports and management information – and that’s a quasi-assurance and compliance function in many respects. 

That’s the first port of call when we start working with a trust company – a monitoring engagement across all of their accounts.

Then, when the monitoring service identifies that there is an issue in any investment portfolio, we give the trustees direction on how to manage that with the third party they’ve employed. 

What we’ve tried to do with our portfolio and our consultancy service is be there as a regulated investment adviser to help them with that next step as well.

So, breaking that down, we have our portfolio service designed for ‘smaller’ trust accounts, which is really a structure that has up to about £20m to invest in a wealth portfolio.

And then we have our consultancy service, which is designed to be much more of a multi-family office, hand-holding, small number of clients, high-touch service at the top. 

The idea is that we can help to get an entire client book in order through our monitoring service – and where there are issues, we’ve got a solution that we can work with the trustees and can help them out on a regulated basis.

What does the client list and scale of the business look like now – and where does the fintech element come in?

We currently work with around 65 trust company groups and, although we’re only a business of 30, purely based in Jersey, we cover every global jurisdiction.

So we’re a small business with a global reach – and this is really where the importance of technology comes in, as without an efficient platform it’s just not possible to service the number of trust companies and underlying accounts we monitor or advise on. 

The number of accounts that go through our system is roughly 4,500 each quarter. It’s a significant number of wealth portfolios that we’re either advising on or monitoring. And the assets under oversight, which is probably the best way of quoting it, exceeds $40bn. 

About 60% of our group’s revenue comes through the monitoring service for the core low-cost proposition.

We have a significant amount of data volume to deal with, in lots of different places, which is why building out our platform – Mosaic – was such an incredibly important strategic decision for the business.

We’ve now got a web-based application with public cloud architecture – and we used a Jersey-based consultancy practice to build the foundations of it.

How exactly does the ‘tech’ element of the fintech offering deliver value?

Two things really stand out in terms of what the technology is enabling us to do. One is to build data feeds with the wealth management community. 

Historically, we would simply receive a PDF or sometimes paper valuations for clients’ portfolios and then have to somehow screen-scrape or manually key all of that data into our system.

What we’re doing now is going out and offering an open API and setting up really any type of data feed that we can get from the wealth managers, who are sending investment data directly into our system. 

That’s very important because it means we can ask for more data and we can ingest more data into our system than we’d ever be able to process manually or scrape.

On the other side of the platform, we’ve set up a client portal that is effectively a portal for trustees to access. It’s a secure multi-factor authentication online portal that has customisable permissions – where appropriate people in trust companies can log in and see information on their clients. 

That enables more interactive access for the trustees with the data and the analytics that we’re producing for them. They can see the charts and they can also go back over time and do some calculations to look at different ratios and so on. 

Your tagline is ‘augmenting fintech with people to create value’, and you mentioned earlier that the balance of human and machine was what appealed to you in your previous role. Does that remain important?

I think the efficiencies of technology need to be embraced and adopted – and certainly what we find in the fiduciary space is that everybody is under time constraints and budgetary constraints.

Everybody’s looking for efficiency in some shape or form, and the way to deliver efficiency has to be via slick technology and integration.

But people ultimately want to deal with people. They want to be able to pick up the phone – ideally to the same person or people. We’ve all had call centre experiences with the likes of the online banks that are challenging – so it’s important we avoid that. The right balance is human and technology combined.

Growth in the fintech sector has been fuelled by customers demanding convenience, efficiency for businesses, speed of transactions, access to real-time information and data. 

Do you see those demands continuing and the fintech sector growing as a result? 

Yes, absolutely. Those drivers, combined with the opportunities created by the open banking revolution – which still has so far to go – mean there remains plenty of room for growth in this sector. 

If you have a bank account with Barclays, for example, you can download a really nice app and you can actually do quite a lot through it – you can manage your bills, you can make payments, you can bring up your statements, and that’s just for a simple bank account. 

But what’s always been surprising to me is the level of transparency on investment assets. The level of access to information for people on their wealth is often very poor, certainly in the offshore space.

Onshore, in places such as the UK and the US, there seems to be more embedded technology, and therefore transparency and integration already in place. But because the offshore world is typically so fragmented and comes from a background of utmost discretion, there really hasn’t been the same embracing of technology seen elsewhere. 

So, I think the spirit of open banking – of integration of data exchange – has a long way to go in our broader space. The reality is that technology brings efficiency and it brings cost efficiency.

It’s a very competitive professional services landscape globally, and technology, by making things more efficient, helps keep down costs that would otherwise just continue to increase if we were working more manually.

BL78_TomWiseman3How will that continued evolution of fintech impact the financial services landscape in future?

I think there’s going to be increasing disintermediation of certain aspects of traditional financial services.

At the moment, typically what happens is that, if you have a certain amount of money, you will get in touch with a private bank or with a wealth manager, you will meet somebody personally and they will set up accounts for you – and you’ll probably have some sort of online access or receive quarterly reports. 

But it will be very disjointed – separated from your bank accounts and any loans and mortgages that you might have, for example. And the reality is it’s not really that helpful, because somebody’s picture of wealth is generally quite broad – assets and liabilities. I think the next generation simply won’t tolerate operating in that way. 

We’ll see more and more people with more significant wealth going down that online services route in future. Currently, there’s a disconnect there and I think that trend of disintermediating or disruption with traditional financial services models is absolutely going to happen. 

Probably the banks are in the best place in some respects because they have already invested heavily in technology.

Once you’ve got that foundation in place, it’s easy to add on other things – whereas I think the more traditional fund managers and wealth managers will have some catching up to do.

One of the well-documented challenges around the fintech space is the battle for talent. Is that a challenge you are witnessing – and what other issues does the sector face right now?

I think that is a challenge on the island, despite some of the really good initiatives taking place – Digital Jersey has increased in prominence and Jersey Finance has the fintech desk now, for example. All those things are really good initiatives. 

We participated in Fintech Demo Day in October, which had hundreds of people involved and was a great event put on by Jersey Finance for businesses like ours.
 
But there just aren’t that many software developers available on the island and I think that over time we are probably going to have to look off-island for some roles – and software development is probably one of those areas.

What’s your growth trajectory from here?

For the foreseeable future, the next three to five years, we’ll remain very specialist in our core offerings – investment oversight to the fiduciary community.

Although we work with a large number of trust companies or trust company groups, in many instances we’re just working with one office or providing one service. 

So our biggest opportunity, certainly in the short term and within our existing client base, is doing more for firms we’ve been servicing for some time, whether that’s simply monitoring more accounts or providing advice services too.

We’re focused on growing organically. We wouldn’t ever discount the possibility of acquiring businesses, but it’s just quite difficult to see which we would acquire in the market at the moment. So we’ll be focusing on organic growth but keeping an open mind.

FACT FILE

Born: Winchester, UK
Studied: Sheffield
Lives: I split my time between England and Jersey now
Family: Married; and we have eight-year-old twins who keep us on our toes
Hobbies: I’m a big Southampton FC fan. My son is Arsenal, so I take an interest in them, too
Other interests: I’m also a big boxing fan


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