As Schroders CEO Works to Turn Around Business, His Advice to Clients: Diversify!

Create portfolios that include active and passive components to achieve the appropriate risk-return trade-off, he says

- Ravi Velloor

Entering the Schroders building in the City of London on his first day as chief executive officer last November, Mr Richard Oldfield's first act was to move his office into the heart of the building, and meet graduates over coffee.

Soon, those familiar with the place noticed that portraits of the founding family, who still control 44 per cent of the 221-year-old UK company, had been shifted from the entrance to another part of the building.

It is not known what the descendants of the founders thought of all this. But the forensic eye of the former PwC accountant—who for five years personally signed off on client HSBC's accounts—seemed to have deemed the new office arrangements important to flag his intentions to modernise one of Britain's hoariest institutions of finance.

The rest, you could say, is work in progress under what a recent Schroders client strategy update described as "a clear plan to profitable growth", which includes a £150 million (S$260 million) reduction in costs over three years.

Although Schroders is regarded as the fifth-best brand in asset management globally and the only non-US firm on that list, profits had slid against a backdrop of rising costs and a shift by investors towards passive investing, pushing down its market valuation.

Who better to take the helm than a trained accountant with a practical approach to life—one who takes the train to work because it is faster than being driven?

Investors are eager to see the strategy bear results. As the 54-year-old Mr Oldfield settles into his job, they have cheered Schroders stock, which has risen 19 per cent in the year to date.