Barclays has woken up to the fact that it happens to control the largest wealth management business in the UK. But, despite a 56 per cent ri...

Barclays has woken up to the fact that it happens to control the largest wealth management business in the UK. But, despite a 56 per cent rise in profits to £172 million (€299.4 million) last year, the division needs to move even faster to hold on to its commanding position.

It has about £35 billon of wealth assets under management, which puts it well ahead of better-known UK managers, such as Coutts and UBS.

Barclays’ past and present managers have taken fortuitous decisions that helped the business to reach the number one position. But success in wealth management has resulted from the simple fact that Barclays is an extremely large financial services group and has been able to redirect retail clients to wealth management – known as incubation in the industry.

Management has allowed this to happen through osmosis rather than a concerted effort, and this kind of management by benign neglect has probably been the policy followed by most large institutions with a wealth management business on the side.

Barclays’ top managers probably did not probably realise the importance of managing wealth more when it bought UK private client stockbroker Gerrard in 2003.

But the person who made the leap is Bob Diamond, who was given responsibility for running Barclays’ wealth management unit two years ago, following his success at Barclays Capital and Barclays Global Investors.

Barclays decided it needed his services to maximise profits from its wealth management sleeping giant but also appointed him out of fear of growing competition for the wealth wallet led by UBS.

In five years the Swiss bank has come from being an offshore private bank for wealthy people to become one of the UK’s top onshore wealth managers.

It has hired aggressively and made acquisitions to become one of the country’s top five in the sector. So something needed to be done at Barclays before the likes of UBS toppled it from its spot.

Encouraged by what he found, Mr Diamond has appointed one of his leading lieutenants Thomas Kalaris to head a newly amalgamated unit, Barclays Wealth Management. Not before time, this combines the wealth management units, including Barclays Private Bank and Stockbrokers, under one brand.

Mr Kalaris was brought over from Barclays Capital in the Americas. Presumably he’ll bring even greater managerial focus to the wealth management business. Other managers are being hired to implement Mr Diamond’s vision of a thriving division.

To no one’s surprise, other former Barclays Capital executives figure among them, including Amy Nauiokas, the new head of Barclays Stockbrokers.

Last week’s profits suggest progress is being made. But an even sharper focus on opportunities is needed. Barclays’ wealth management division needs to re-brand to bring it into the 21st century, just as UBS improved its image through its You and Us campaign. In that respect, Barclays Wealth would be a brand with considerable potential.