Horses and race courses with Weatherbys Private Bank

Date: 26 Oct 2010


Weatherbys opened their doors for business in 1770, but not as a private bank, they were originally set up by James Weatherby, a lawyer, to hold money for horse racing clients and pay out prize money. Twenty years later as their knowledge of horses grew, he set up a stud book which kept records about all thoroughbred horses . “You can only run a horse if it’s in the stud book.” explains Roger Weatherby, a seventh generation family member involved in the business . “Every country now has a stud book based on ours.”

Weatherbys is solely owned by the Weatherby family with Roger and Johnny Weatherby holding the reins as Chief Exec and Chairman respectively. There are also twelve children and cousins who are now the eighth generation to work in the business and are being groomed for succession. The incarnation as a bank is fairly recent, Weatherbys has historically been more a horse racing association dealing with back office administration in the UK sport than in financial services. Although money in the form of holding horse racing prize money has always been in Weatherby blood.

Roger Weatherby explains “Prize money comes from owners entry fees, race courses put in money from gate fees and their sponsors and there are levies on book makers. All that money is deposited with Weatherbys for administration.” Weatherbys publish race cards and are back office administrators to the sport including for The British Horse Racing Authority who were formerly the Jockey Club. “People enter races about five days before hand then two days before declare the races they will run in. We then publish the race meeting papers and distribute them.”

“Most horse racing people have had a financial relationship with us.” says Weatherby who is moving the private banking operation from a canter to a gallop, “So it seemed natural for us to apply for a banking licence which we did and we got this three years ago. We started with basic banking at first and are now developing this further with the private bank concept and discretionary investment management which is launching in October. We have 19,000 accounts and 16,000 registered horse owners in our client base and clients are a mix of people who could be agricultural families who’ve had a relationship with us for more than two hundred years through the generations to doctors, lawyers, footballers with race horses and financial services individuals like fund managers. In the past a Middle Eastern client may have just used us for their racing transactions and put only a small amount of their money with us but things have changed as our services have developed and we now work with a much larger slice of our client monies.”

Weatherbys have three hundred and fifty people with sixty working specifically in the bank and says that half of their clients are from the racing community. “Most of the staff have been here for twenty five years.” explains Weatherby. “We are pleased about that. We aim to be a bank that doesn’t operate like a bank and for that reason nobody gets commission on their salary. They just get paid well for a job well done.”

Adrian Crichton, formerly at Barclays Wealth, dealing with offshore wealth management, says they are looking for entry level clients with assets at circa ¬£3million or ¬£250-300,000 income per year. “We are adding products like cash management, current account mortgages, forex and funds. It’s taken two years to build our offering for the bank but we are in place now to properly operate .”

Other hires at Weatherbys include Simon Tuck brought in from Hoare & Co to work on tax planning which they say younger clients are showing interest in. “We are building a team around him.” says Weatherby. ” We used to work with an accountancy practice but we felt it was too complicated for clients who were having to talk to us about their money and other issues but then had to go externally for other tax advice and potentially go back and forth. Simon Tuck will have two financial planners and won’t do complex inheritance work, he will simply give a general outlook then specialist work will be outsourced. It will mean more business for intermediaries because we really haven’t done any work of this kind before. Although we are always aware that some intermediaries won’t want us to discuss tax planning with their clients and we will honour that wish and are happy to operate solely as a banking function if requested to do so.”

Crichton says Weatherbys are launching a discretionary management service in October which will be funds based and for people with portfolios of between ¬£500,000 -¬£2million. “It will be the third area of our wealth management offering. We have an asset allocation model that will look for the best funds but we are staying away from hedge funds. We will put money into a variety of different asset classes over a ten year period but client money is not locked in, it’s still liquid but we want long term investors so are saying up front it isn’t for those who wish to dip in and out. It’s not a short term investment proposition. We are also offering cash management, which means we put money with third party banks to get a better return for clients on cash. So moving money around for clients to create earnings. We do this for clients with ¬£1-2million sitting in cash.”

Of trends, both Weatherby and Crichton say they are seeing a demand for lending but as an organisation they don’t lend more than forty five percent of their deposit base (on assets of ¬£250million). Unusual lending which they will consider includes lending against a stallion which would be to the tune of ¬£5 million which Weatherby says is about half the cost of a good stallion. They are also seeing a demand for bridging finance, buying land and general down sizing from clients or adaption of private estates for commercial purposes like weddings to generate income. “We secure ninety percent of our lending against property but we do it thoughtfully.” says Weatherby. “For instance recently a client had an estate and wanted to develop part of it, so we took security against three of the cottages instead of the whole estate.” Interest rates vary client by client.

Roger Weatherby says of their burgeoning operation . “We have 12,000 clients and don’t want to be too much bigger. We want one person to speak to each client, so they each have a private banker and someone dealing with their affairs day to day. We want to do everything by telephone with a personal touch.”
As well as his day job in the horse and financial worlds, Roger Weatherby is also an adventurer having gone to the South Pole in 2004/5 with Simon Dalglish of Fox Interactive Media who works with brands like Myspace, to support the charity “Walking with Wounded” which helps rehabilitate wounded soldiers.

Weatherby, with his obvious love of horses has also spent considerable time travelling the world on horse back. “I left Cazenove in ’96 and took time out to ride across Spain and France.” says Weatherby who has a Masters in Finance from the London Business School .”I’ve also spent time in Pakistan. They have a real tradition of Polo there and it isn’t just for the elite, people from all walks of life watch it.”
Weatherbys recently announced that Roddy Buchanan formerly of Ansbacher has also joined.

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