Fifteen years after co-founding Lord North Street, one of a new generation of wealth management firms which rose alongside the concentration of global wealth in London, William Drake has stepped down from a full-time role at the business (now merged into Sandaire Investment Office). But even as London’s wealth has grown, Drake expresses disappointment in an interview with Spear’s that the radically reshaped wealth management landscape he envisaged then has largely not come to pass.
But first, the good news about the future. Drake is joining RFR, a ‘property private office’ run by Richard Rogerson, late of Macfarlanes, and Sophie Rogerson, a former City lawyer. RFR, says Drake, does everything from residential property finding, interior design and project management to managing a buy-to-let portfolio and even assembling said portfolio. He is joining to advise on management and strategy, as well as helping to raise RFR’s profile among his wealth management network.
Drake says he sees in RFR the spirit of the early days of Lord North Street, which he and Adam Wethered co-founded in 2000, ‘brimming with enthusiasm and talent and fun’. He identifies with RFR’s aim to provide an ‘incredibly professional’ service, which he says was also lacking in the wealth management industry at Lord North’s birth. (He and Wethered are now senior advisers to Sandaire on two-day-a-month retainers.)
In 2000, there were almost no open-architecture firms, ie wealth managers who could invest in any funds, not just their company’s own (‘pushing products’). ‘When we started,’ says Drake, ‘the banks really were saying they advised their clients but they were making money out of selling them products.’ Now, ‘open architecture’ has been adopted as a mantra and proof of independence by banks and wealth managers alike.
Drake hopes ‘that we in some way had some part in changing that thinking’, and it’s undoubted that they did: their clients, with portfolios of £25 million and above, had their expectations of impartiality elevated, which spurred on the wealth managers who followed and their competitor banks to do the same. He gives the larger share of the credit, though, to government regulation, which made product-pushing harder.
But while the game has changed radically, the players have not, and this is Drake’s disappointment, that the family office space hasn’t grown more: ‘I thought by now we would have had a dozen really top-flight private investment offices managing billions; England would be the place to go to for this fantastic family office industry.’
Instead, because of competition from banks and a burden of regulation which weighs too heavily on smaller firms, we have seen a wave of mergers (Sandaire and Lord North, Ingenious and Thurleigh, Fleming Family & Partners and Stonehage, among many others) and a thinning-out of the landscape.
In particular, Drake says he hoped Flemings would be the ‘flagship in London of our industry’, with billions under management and its ‘wonderful name’ from its founding family. ‘It just hasn’t worked out. Can you imagine if they were now thought of like Bessemer in the States?’ (Bessemer have $100 billion under supervision across nineteen countries.) Nevertheless, he says ‘great opportunities’ still exist for Sandaire and its field.
So while Drake may be largely leaving behind an industry he has helped to change, he is moving into one he hopes he can help change even further.