The only way is up

By Julian Rogers, Deputy Editor

Barclays Stockbrokers – the UK’s largest retail brokerage – has mushroomed by 30 percent in the 18 months that Amy Nauiokas has headed up the business. Here, the 35-year-old American talks to FST about the emergence of the self-directed investor, the importance of innovation and how a lie-in once saved her life.

By reaching the top position at Barclays Stockbrokers, Amy Nauiokas has displayed both talent and dedication. Speaking at Barclays’ HQ in London’s Canary Wharf, Nauiokas comes across as confident and relaxed as she recounts her career and how her position as head of the UK’s largest retail broker is in stark contrast to her career aspirations as a teenager. Back then she had her heart set on working for a not-for-profit organisation. However, after a stint working for the Peace Corps and time spent in Africa she conceded that she didn’t have the “hardcore skills”, as she puts it, to make a difference. So her attention switched to the corporate jungle and the world of finance. And in her own words she became a “Jack of all trades” in corporate strategy and management. “I found myself staring straight into the eye of the electronic commerce revolution in the late nineties when my friends were all off enjoying ‘dot coms’.”

In hindsight, this decision was a career gamble that paid off. At ease with my questioning, Nauiokas waxes lyrical about Barclays’ stockbroking arm: “The business was essentially a share dealing service when I arrived about 18 months ago. During the past year and half we have been on a journey to create a portal for the growing number of self-directed investors across the UK. We offer a significantly larger choice of products and services including tools, research and data to help them manage their own portfolio.” In terms of numbers, Barclays Stockbrokers, which is the brokerage arm of Barclays Wealth, currently holds over UK£9 bn in assets and boasts more than 300,000 clients.

So are Nauiokas’ customers investing money with a view to the long term or instead jumping in an out of markets in a bid to lock in quick profits? I ask. “It is a bit of both,” Nauiokas explains. “We have a very interesting client base – some of whom are very active traders who trade on a daily basis – and we also have those investors looking for an ISA or a fund that they are going to hold for the long term. So within our market you see all types of investors increasingly being served by an online portal that would have historically been where only day traders went.”

Financial jitters
The timing of the interview in early August coincided with an especially turbulent period for the global markets. Investors were enduring an erratic rollercoaster ride with global markets suffering volatile swings as fears of a credit crunch began to bite. “One thing about being an execution-only broker is that volatile markets are extremely busy for us,” Nauiokas states. Referring back to similar market volatility in February, she notes how the business found 50 per cent of customers were buying while the other half were selling. “By the time the markets settled 60 per cent of trades were buys which would suggest that investors are seeing these temporary blips as buying opportunities.

“It is interesting to look at some of these market corrections through our customers’ eyes. Over the last couple of years our clients have clearly become more confident and more knowledgeable about the markets. The self directed investor is driving a demand for increasingly sophisticated products and remaining active in all types of market conditions.” Indeed, it is the rise of the self directed investor that likes to take control of his or her investments is driving much of the growth at Barclays Stockbrokers. Research carried out by the firm shows that two thirds of retail investors either hold or are considering taking out the popular Self-Select ISA by the end of the tax year. The more sophisticated retail investor is also buoyed by the wealth of information that he or she has at their fingertips today. All-important data, once exclusive to the institutions, is now readily available to individual investors. This, combined with software and other tools available, has made the business of active trading a real possibility for many.

“They [our customers] are growing increasingly sophisticated and that is largely because they are growing more confident. We are also seeing that in some cases the individual retail investor requires the same level of service, products and technology as an institution, corporation or hedge fund would. This creates a demand on a wealth or investment provider like ourselves where we have to come up with products and technology that would otherwise have been reserved for the big institutional markets.”

Higher or lower
As well as being able to buy and sell shares, Barclays Stockbrokers now offers a spread trading service. Here, for example, a predicted future price of the FTSE 100 Index is given a quote; the investor then ‘buys’ (goes higher) or sells (goes lower) for a pre-determined stake. To put it simply, the more you are right, the more you win, but get it wrong and you could be staring down the barrel of a hefty loss (although you could chose to include a stop loss order). All profits are free of UK Capital Gains Tax, making it an exciting alternative investment opportunity, as well as one that can offer rich reward for canny individuals. And it’s not just share prices that you can bet on; there are spreads on future prices of currencies, indices, oil, gold, and other commodities, as well as what interest rates will be a few months down the road. “People who understand market dynamics and appreciate buying opportunities know there is a significant tax advantage to using financial spreads and CFDs (Contracts for Difference).”

And the recent volatility in the equities markets lured additional investors into the spread trading and CFD arena, says Nauiokas. “When the markets turned earlier in the year and last week, in addition to having very high volume days in the equity space, we had a very significant spike in our financial spread and CFD trading. This would suggest that these are people who understand that downturns in the market can lead to buying opportunities.” But because people can lose (or win) a great deal more than they stake I suggest to her that it is not an investment for everyone. Nauiokas agrees: “With every investment you have got to understand and appreciate the risks associated with it. We have done quite a bit to make sure our customers are educated in the ups and downs of products like financial spreads.”

However, these more ‘risky’ products have been attracting the more cautious investor lately, she notes. “We have really seen customers who were previously less risk-adverse migrating to the spreads and CFDs, which indicates an increased level of sophistication in the retail investor. These products are not just reserved for the day traders any more.”

Innovation
Behind all of these offerings is of course a whole heap of technology. For Nauiokas, it forms the backbone of the company. “I cannot underline enough the importance of technology to a business like mine. I personally believe that technology is the foundation of any financial services business worth its weight. By building a solid base for strong technology you can use it as a way to innovate and separate yourself from your competitors. This is crucial in a competitive market like financial services.”

She reveals how Barclays Stockbrokers has an in-house technology team tasked on keeping operations running smoothly, making upgrades and launching new products. And when it comes to new products and services, being innovative and aware of what will and won’t be a hit with investors is key. But Nauiokas warns that you can’t stand still for long. “Once you innovate it doesn’t take long for people to catch up. We don’t tend to be the copycats but instead the innovators. In order to do that you have got to ring-fence at least a handful of your best technologists.” To back up the investment products, the firm offers professional trading platforms as well as research, analysis, company news, and other customisable tools; in fact, everything to keep you on the ball when managing your portfolio of investments online.

Casting an eye of the next 12-18 months the Barclays Stockbrokers boss says that the success in the UK market will be used as a springboard for European expansion. “We have very broad European goals and we see some big opportunities there. I also think that a big growth area for us is going to be our professional trading tools and services. This platform is going to be aimed at the people who trade actively or those who are prepared to take a risk but demand a high level of information, deeper data and faster systems.”

Time management
As the interview winds down I quiz my subject on what she considers the secret behind her success as a young female professional herself. The answer: “very little sleep.” Nauiokas is behind her desk by 7am, Monday to Friday, and doesn’t normally leave the office until late. When she is at home she likes to spend some quality time with her three-year-old son. She also does her best to find time for her hobbies – horse riding and yoga.

Of course, in today’s business climate of remote working and always being connected with mobile devices there is often a pressure for executives to work all hours of the day. I’m keen to discover is this is the case with my interviewee. “Yes, it is true that I have spent way more time on a mobile phone or a Blackberry than I probably should for an average human being,” she admits. “But knowing that I have got that flexibility in my hands means that I can put it down for an hour and go and do something that I would not have otherwise done because I was chained to a desk. I can grab an hour with my son and put him to bed before getting on with some work.”

Nauiokas has also been driven by the events of September 2001 when a late start meant she had not yet reached her office in the World Trade Center when it was struck by terrorists. Two-thirds of Nauiokas’ colleagues (658 staff) lost their lives on 9/11 and, as you would expect, that tragic event had a profound effect on her. “It was certainly a hugely powerful moment in my life – both personally and professionally. I look at myself as very lucky and I look at everyone else who died as very unlucky. As far as I’m concerned I could just as easily have been in that building.”

Nauiokas, who was working as Head of Marketing at the time, together with the rest of the survivors at Cantor Fitzgerald, then embarked on the colossal task of getting the business back on its feet. Cantor Fitzgerald had sound disaster recovery plans in place, including three remote data centres, but the days immediate following 9/11 were all about triage and making sure there was enough of the core technology up and running. “I saw the company essentially rebuilt, including the technology infrastructure, with a handful of people, three pizzas and a couple of cans of coke. When you have seen something like that everything else is pretty easy.”

From chatting with Nauiokas it seems that she is grabbing all the opportunities at Barclays Wealth with both hands because of the lessons she took on board from her lucky escape six years ago. “It [9/11] teaches you to live every moment to its fullest as it could very well be your last. This is something that I try to remind myself of every day.”