Dolfin makes waves in bionic wealth
Founded in 2013 and rebranded just two years ago, USD1.7 billion digital wealth manager Dolfin has been making a series of key hires.
Dolfin’s CEO Denis Nagy has been joined by a new head of investment management Richard Gray; Simon Black as senior wealth manager and Nick McCall, head of wealth management.
Nagy founded a brokerage and custody business in the UK which he sold to a private bank and Dolfin is his ‘second baby’ which he describes as: “A wonderful opportunity to build something without legacy but a vertically integrated business.”
“I was conscious of the need to have control over execution and safekeeping of assets, all combined with investment expertise reinforcing that,” Nagy says. “It’s important that you are able to get enhancements to your offering in all of these sectors so we have been building and one of the key motivations has been ‘how do we create a new business model in wealth management’?”
Nagy wanted to create a firm that was more functionally capable than other private banks or platforms.
“We are offering a very flexible regime for high net worth investors with multi asset accounts, both traditional but also covering derivatives and multi-currency on a global reach with powerful global custodians. This allows us to access any markets international or local and clear with a Forex overlay on that and all at our own disposal,” he says. “Our competitive advantage is our vertical integration and it is now a good time to put this technology enabled model at the disposal of experienced people hence the new staff.”
Dolfin works with high net worth individuals, other wealth managers and multi-family offices, providing support in terms of custody, execution and investment advice.
“We work both with end clients and those who are servicing them,” Nagy says.
McCall explains that he comes from a long history of traditional banking and, most recently, was running a small multi-family office. McCall describes Dolfin as more a tech savvy precocious teenager than a new baby.
“The higher end of the wealth management industry has not been sufficiently disrupted,” he says. “There has been disruption in the retail and mass affluent but not at the top end and that is what excites me about Dolfin.”
McCall estimates that trillions of dollars will transfer from the baby boomer generation to the next generation.
“If you talk to their children, more than 50 per cent of them are saying they will leave their wealth managers if they don’t get the right channeled technology experience.”
McCall points out that there are huge cost advantages to using technology well but that it’s not about having a robo-adviser service. “It’s allowing the relationship managers or advisers to cut down the amount of time they spend on administrative functions, particularly after regulatory changes, and more on spending time with the clients themselves.”
Nagy says that his firm has a team of 15 developers building key technology in-house, and plans to release its software products to the wealth management community next year.
The firm is committed to using Malta as its offshore centre, offering custody, depositary, execution brokerage and asset management services to private clients, financial advisers and institutional investors from both London headquarters and the newly expanded office in Valletta.
Nagy says: “Malta is an interesting jurisdiction because it is historically very close to the UK, part of the Commonwealth and with a legal system based on the English system. It is also one of the few European jurisdictions that are part of MiFID and AIFMD and also has a flexible fund regime.”
Nagy is developing his theory of bionic wealth management. “We are building our technology around the needs of the client,” he says.
“The robo-adviser interpretation doesn’t necessarily work because people want a human touch combined with efficiency. We need to automate and make the user experience as good as possible with technology enabling investors and their advisors – they should be enabled by technology, not replaced by technology.”
McCall says: “It will be a real challenge for the industry to get that balance right – the trick is not to have technology create the barrier. But our future clients lie in the new money that is being made by a dozen unicorns (a unicorn refers to any technology start-up company that reaches a USD1 billion dollar market value as determined by private or public investment) in London,” McCall says. “These are young people making money and technology gives them a sense of security. The wealth management industry has had a challenge in dealing with this particular cohort. The older generation is happy to have a traditional banker in a stuffy London office with bits of paper but if you said to their children ‘come and sign 50 signatures on bits of paper’ - they would recoil. They want it on-line.”
Nagy confirms that the firm is about to release a number of new products that will aid the vertical integration of financial services businesses.