Profile - Robert Taylor: Going where the clients are will be key to life after the recession

IT'S been a rollercoaster couple of years for Kleinwort Benson.

The company has had to navigate its way through the collapse of the financial sector while undergoing two changes of ownership.

The second sale from Commertzbank to the Belgian investment group RHJ International, which was announced last October, is still ongoing, but I get the feeling that chief executive Robert Taylor is hoping that 2010 is the year that the bank returns to stability.

RHJ International plans to adopt the bank as an overarching brand for its financial services business.

Mr Taylor says: "They (RHJ International) really wanted the franchise, which was important for us because as a management team we felt the franchise and the impact that a sale might have was the most important thing to protect."

Although Kleinwort Benson wasn't affected as dramatically as some of the big retail banks it has had to undergo some restructuring, which included losing about 30 staff – five per cent of its total headcount.

In the last year the private bank has reported revenues of just over 80bn, a 20 per cent decrease from its highest point of 100m in 2007, and it made a profit of just 5m. It has about 3.5bn in assets.

Mr Taylor, 50, says: "I think 2010 is still going to be a bit tough. The big issue we have still is interest rates and like most banks our treasury operation makes money off the back of interest rate volatility.

"It's also quite competitive now because when you have rates this low any margin you try to build in with profit for yourself looks too much in the competitive market place and every bank is trying to shore up its liquidity situation and hold on to deposits."

The key to a strong recovery, Mr Taylor believes, will be the bank's regional offices.

Over the last three years, Kleinwort Benson has established offices in Leeds, Manchester, Edinburgh, Birmingham, Newbury and Cambridge, to cater for the growing market for wealth management outside London.

"It is our big bet that we will grow more assets by having a presence where the clients are rather than having the expectation that the clients will come and find us in London somehow," he says.

He adds: "For us, it will be another year or so before we're making good sums of money and we can see real light out of the end of the tunnel. I suspect that's probably similar for most of my colleagues in this industry."

Mr Taylor believes the sector needs to draw up a new code of conduct to make it more transparent.

"We need to have a lot more uniformity in terms of what we expect a private banker to do in terms of qualifications and industry knowledge."

He adds: "What we've learned in the last 18 months is that when push comes to shove, a lot of clients didn't fully understand what they were doing and, therefore, we as institutions, had to take full responsibility for that.

"Hopefully the fact that we are really struggling to come back into a strong level of profitability has taught us a lesson that means these professional standards are worth trying to meet."

But he acknowledges that for any change to actually take place, someone in the industry needs to kickstart the process.

Besides a new code of conduct, Mr Taylor agrees with the Walker Commission, which last year published a review of corporate governance and warned that boardroom management culture must become "more challenging".

"A big part of the risks we were associated with prior to the credit crunch was the lack of direction in terms of true risk policies from a lot of the boards," he says.

He also criticises the bonuses paid out by the Government's bailed-out banks, which have caused such controversy.

"The reality is that we have a culture where people are compensated in salary plus bonus.

"Personally, I believe that in RBS's case the better option would have been to have said any bonus that is going to be paid above a certain level will be used to buy back the shares that the Government owns in the institution and therefore those employees would have been expected to hold on to those shares for three years or so."

Mr Taylor joined Kleinwort Benson in 2004 after spending five years as head of private banking at Coutts & Co.

He was previously managing director of SG Hambros Bank & Trust in London and before that he worked at Merrill Lynch International Bank where he qualified as a financial consultant. Although born in London, his English parents moved the family to California when he was eight years old.

He describes his upbringing as "liberal". His parents were keen for him and his two sisters to become academics.

"I don't think it (financial services) was the first choice that my parents had had for me. My mother still always says things like 'You can always go back and become a teacher'. They had a middle-European view of academics as the highest possible accolade or career anyone could have."

Mr Taylor studied international affairs at Lewis & Clark College in Oregon and did a masters in journalism at Columbia University in New York before starting his career working for a politician in Washington DC.

After becoming disillusioned with politics he became a writer on a financial newspaper and from there he decided to enter the financial services sector itself.

He returned to the UK in 1994 but said he didn't feel the culture shock that many of his American counterparts experience.

"I think I have an English sense of humour through my family so I don't feel exclusively American," he says.

Mr Taylor, who married his partner, Michael Kallenbach, in a civil partnership four years ago, is one of the City's best-known openly gay movers and shakers and finds it surprising when he comes across people who keep their sexuality a secret.

"I've never felt there is some sort of imaginary straight male code of conduct that you're supposed to adhere to in the City," he says. "I'm still rather surprised that people have a lot of problems discussing it. I'm quite sad that it still seems to be an issue for people."

In his spare time, Mr Taylor collects contemporary art but admits that buying new pieces often makes him nervous.

His most heart-stopping moment came when he commissioned a South African team of artists to paint an elaborate portrait of him to mark his 50th birthday.

They dressed him in a black cloak with bright fabrics draped around his body and placed unusual items on him, including a gold frisbee on his shoulder.

He says: "As we sat down to actually go through what we were doing, I did actually think twice and think 'gosh, is this really the right thing to do because now I'm actually going to be the subject of the work of art."

ROBERT TAYLOR

THE CV

Title: Chief executive of Kleinwort Benson

Date of birth: January 4, 1960

Education: Lewis and Clark College in Oregon, and Columbia University

First job: I worked in a hamburger place

Car driven: I cycle in London and have a Porsche at my home in Wiltshire

Favourite song: The most frequently played song on my iPod is Famous Last Words, by My Chemical Romance. I'm not sure why.

Favourite film: Disgrace

Favourite holiday destination: South Africa – we have a house there

Last book read: Spud, by John van de Ruit

What I am most proud of: My relationship. I wouldn't have been able to achieve everything I have without my supportive partner.