Definition of Definition of “Boutique” “Boutique” in Englishin English

Originally, only a small dress shop Originally, only a small dress shop specializing in up-market fashion for selected specializing in up-market fashion for selected customers.customers.

Then, extended to the financial field to Then, extended to the financial field to cover “specialist stockbrokers”.cover “specialist stockbrokers”.

Now covers any small specialist Now covers any small specialist company, especially in the financial sector. company, especially in the financial sector.

It would seem that large entities, by It would seem that large entities, by definition, cannot be or own a boutique.definition, cannot be or own a boutique.

INDEPENDENCE INDEPENDENCE is an important aspect which is an important aspect which

allows :allows :

Specialization Specialization Personalization Personalization Decision makingDecision making EntrepreneurshipEntrepreneurship Confidentiality Confidentiality Flexibility Flexibility Continuity of client contactContinuity of client contact

SPECIALISATION SPECIALISATION

While large entities have their While large entities have their specialist departments and have a much specialist departments and have a much wider access than any boutique, the wider access than any boutique, the boutique is more effective in producing boutique is more effective in producing information and also has access to all the information and also has access to all the same information as the larger entity. same information as the larger entity.

Furthermore, a specialized boutique Furthermore, a specialized boutique will receive more client inquiries than a will receive more client inquiries than a large generalist entity and can charge large generalist entity and can charge more, in most cases, because of their more, in most cases, because of their “uniqueness”.“uniqueness”.

PERSONALISATIONPERSONALISATION

More attention is paid to individual More attention is paid to individual accounts in a small entity both in terms accounts in a small entity both in terms of personal service and in the of personal service and in the professional services offered. professional services offered.

In a larger institution there is an In a larger institution there is an unavoidable tendency to categorize and unavoidable tendency to categorize and “computerize” the clientele with the “computerize” the clientele with the effect of losing the individual touch. effect of losing the individual touch.

DECISION-MAKINGDECISION-MAKING

A large entity is compelled to lay down A large entity is compelled to lay down policy rules on advisory and decisions, which policy rules on advisory and decisions, which become procedural. A boutique can react freely become procedural. A boutique can react freely and immediately to given situations and because and immediately to given situations and because of its small size can apply them speedily. of its small size can apply them speedily.

For example, in most investment For example, in most investment boutiques, the carrying out of an investment boutiques, the carrying out of an investment decision and its result can be executed on the decision and its result can be executed on the spot. In a larger firm, it must pass through one spot. In a larger firm, it must pass through one or more departments such as credit, trading, or more departments such as credit, trading, administrative… administrative…

ENTREPRENEURSHIPENTREPRENEURSHIP

There is much more scope in a small There is much more scope in a small (one man) boutique to investigate new (one man) boutique to investigate new ideas and ways of doing business which is ideas and ways of doing business which is impossible in a large entity with fixed impossible in a large entity with fixed procedures and rules. procedures and rules.

A larger boutique will start to run into A larger boutique will start to run into the same kind of problems as a big bank, the same kind of problems as a big bank, where free thinking has to be discouraged. where free thinking has to be discouraged.

CONFIDENTIALITY CONFIDENTIALITY

A large entity may have to have a A large entity may have to have a minimum of ten to twenty employees minimum of ten to twenty employees having access to all the clients private having access to all the clients private situations. situations.

In a boutique, this is usually reduced In a boutique, this is usually reduced to two even one person only and this factor to two even one person only and this factor alone is a decision element for clientele. alone is a decision element for clientele.

FLEXIBILITYFLEXIBILITY

The large banks make great efforts The large banks make great efforts to meet the extra demands of large to meet the extra demands of large customers but this is difficult in the customers but this is difficult in the context of a big administrative context of a big administrative organisation.organisation.

Boutiques do not have this Boutiques do not have this problem.problem.

CONTINUITYCONTINUITY

This is one of the greatest advantages of This is one of the greatest advantages of boutiques – where the customer is assured of boutiques – where the customer is assured of continuity in his relationship. It is a statistical continuity in his relationship. It is a statistical fact that boutique employees change less than fact that boutique employees change less than larger, more impersonal ones.larger, more impersonal ones.

I have had numerous examples of this – on I have had numerous examples of this – on that sticks out significantly – a customer for ten that sticks out significantly – a customer for ten years in a large bank who went through three years in a large bank who went through three excellent employees, each of which was excellent employees, each of which was promoted before his second meeting. He finally promoted before his second meeting. He finally ended up with a permanent one – who did not ended up with a permanent one – who did not get promoted because…get promoted because…

Where boutiques should not Where boutiques should not compete and the advantages of compete and the advantages of outsourcing.outsourcing.

The less a small outfit spreads The less a small outfit spreads itself, the more effective its specialist itself, the more effective its specialist aspect will be. These functions will aspect will be. These functions will normally not require expertise but will normally not require expertise but will require trust and coordination with the require trust and coordination with the outsource.outsource.

Examples of this are: Examples of this are: a) generalist investment advicea) generalist investment advice

b) receipt of market information and b) receipt of market information and analysisanalysis

c) updating of changes in the markets and c) updating of changes in the markets and pricesprices

d) marketingd) marketing

e) come back office tasks such as e) come back office tasks such as accountingaccounting

f) increase of the use of regular brokersf) increase of the use of regular brokers

But in the fields of boutique But in the fields of boutique investment, it is the banks who investment, it is the banks who increasingly have a problem competing increasingly have a problem competing with larger entities. The larger the entity, with larger entities. The larger the entity, the greater the requirement of an the greater the requirement of an independent individual.independent individual.

Recognition of this is always slow Recognition of this is always slow and the person or individual who does and the person or individual who does recognise it first has a distinct advantage.recognise it first has a distinct advantage.

OBJECTIVITYOBJECTIVITY

One of the more important, One of the more important, more indefinable and less accepted more indefinable and less accepted advantages of a boutique over a advantages of a boutique over a large finance company, stockbroker large finance company, stockbroker or entity.or entity.

OBJECTIVITYOBJECTIVITY

A boutique by definition must be independent and not A boutique by definition must be independent and not owned or controlled by a larger entity. Especially in owned or controlled by a larger entity. Especially in finance, this should give it an invisible advantage on finance, this should give it an invisible advantage on advisory as being a free agent in the market and in advisory as being a free agent in the market and in particular:particular:

On structure:On structure: - corporate- corporate- social- social

On investment: On investment: - No conflicts of interest- No conflicts of interest- Choices of broker and bank- Choices of broker and bank- Greater discretion- Greater discretion- Overall picture e.g. Where there - Overall picture e.g. Where there are 2 + bank accountsare 2 + bank accounts