Phanos Theophanous on why traditional wealth managers must adapt to modern trends

Phanos Theophanous left Cyprus and a stable accounting career over 13 years ago to chase an opportunity that arose in the UK, where he now lives and works.

In London, he co-founded Cypriots in the City, the largest and fastest growing network of professional Cypriots in the UK.

Having worked for many years in banking in the UK, can you pinpoint a particular aspect of your character that has led to your professional success in this sector?

I would say that passion is the most important quality. I have been at Barclays for almost 14 years and I love what I do. Building relationships and networking with fellow industry professionals, prospects and clients is important as well. Integrity is another quality that one needs in every business, in my opinion. In our industry, staying informed about regulatory requirements is a must, as well as keeping on top of the financial markets and general macroeconomic developments. Furthermore, active listening and transparency with clients is crucial. Needless to say, the client always comes first!

What led you to seek opportunities in the UK and did you face any difficulties with leaving a career in Cyprus?

An opportunity arose and I decided to explore it further. This goes back to what I said about building relationships and being passionate about what you do. Many friends at the time thought that leaving the stability of a well-paid job in Cyprus was crazy! The question “What if you fail?” came up a lot but I was excited by the challenge and felt that it was worth the risk.

You originally worked in the accounting sector and switched to banking. Why did you make this move and what challenges did you face as a consequence?

Changing countries and industries at the same time was challenging but I had worked in London before so it was a return to what I call my second home. The biggest challenge on coming back to London was adjusting to the banking culture, which is very different from that of accounting. Working collaboratively and using the wisdom of colleagues who had been in the industry for a long time helped me overcome these challenges.

Also, I arranged many meetings with other stakeholders to understand what a universal bank like Barclays could offer to an Ultra High Net Worth Individual (UHNWI) in addition to private banking, as my aim was to be able to serve clients holistically. I must say that, at the time, I was positively surprised by the entrepreneurial nature of private banking.

A big difference with the accounting world was the fact that I could serve clients globally, irrespective of jurisdiction – subject, of course to cross-border rules – whereas in the accounting profession I could only advise clients on their affairs in the jurisdiction I was based in. Furthermore, over the first few months, following the relocation, the strategic recruitment team of Barclays were very supportive to me and my wife and helped us make our transition as swift and easy as possible, especially as this was the first time that my wife had lived in London.

What are the current challenges and opportunities in the wealth management sector and, given the geopolitical landscape, what trends do you see emerging?

The sector is facing many challenges. Importantly, regulatory changes have to be monitored constantly and be adhered to. The digital transformation of the sector is another challenge. Traditional wealth managers are having to adapt. The younger generation is more tech-savvy and wants digital first, as well as demanding more personalised and ESG-focused investment solutions.

Cybersecurity is another important challenge. The rise in cyber threats obliges firms to invest in robust data protection and cybersecurity measures to safeguard client assets and data. As for opportunities, there are many. We are about to experience the largest wealth transfer in history – US$18.3 trillion is expected to be transferred globally by 2030. This will be the largest intergenerational transfer of assets in history and is a huge opportunity for the wealth management sector.

How challenging is it to guide UHNWIs to make sound investments, given the number of opportunities out there and the culture of ‘magpie-investing’?

What is particularly attractive in private banking is that no two clients and no two days are the same. We have clients who are very conservative, for whom we manage low-risk fixed-income mandates, and clients who have a greater risk tolerance, for whom we manage leveraged global equity portfolios, in addition to classic multi-asset class portfolios.

We continue to see growing demand for Environmental Social Governance (ESG) and Impact Investing. There is also an increased interest from clients looking to invest in ‘real assets and real businesses’ and direct investments, both in startups and unlisted companies. Many of our clients invest in disruptive fintech startups through our entrepreneurial networking ‘Barclays Accelerator’ platform, run by Techstars.

Furthermore, we can further support our clients and deepen these important relationships by leveraging the expertise of colleagues from across Barclays Investment Bank and Barclays Corporate Banking.

Do you have any suggestions on how to improve the investment and financial landscape in Cyprus?

In my opinion, we need better financial education in Cyprus. This should start from school where financial education should be a key subject.

Can Cyprus become a destination for Family Offices?

There are already a number of Single Family Offices in Cyprus. However, the nature of the business of a Family Office means that it’s not something that you will come across by making an Internet search. It’s worth pointing out that many Family Offices have Cyprus companies in their structures.

The challenge is whether Cyprus can attract more Family Offices from geographical areas that do not currently use Cyprus and increase its share of the wallet from this industry. In my personal opinion, Invest Cyprus is conducting a fantastic campaign for Cyprus and I hope that its efforts come to fruition.

Has Cypriots in the City been able to build bridges and foster stronger connections for younger Cypriots working in finance in the UK? How do you try to inspire younger Cypriots who may be seeking careers beyond the island?

Today, Cypriots in the City is the largest and fastest growing network of professional Cypriots in the UK. It also has a branch in Ireland and is represented in Hong Kong and the UAE.

Every year we have an event for final-year school students who intend to study in the UK, informing them of opportunities in the UK market. In addition, we have an event for UK and Irish University students and a mentoring scheme for second- and third-year students and junior professionals.

There is also a Youth Committee which specifically focuses on the needs of those under 30 and a Student Sub-committee that focuses on the needs of students.

Furthermore, we organise various panel discussions and networking events in which many young Cypriots participate.

This interview first appeared in the March edition of GOLD magazine. Click here to view it.