William Cash on the recipes for success in HNW beauty parades, and misplaced blame in the fight to tackle dodgy properties
One of the things I most enjoy about compiling The Spear’s 500 — our annual guide to the UK’s top private client advisers — is that I get to interview (OK, lunch with) some of the most successful wealth managers around today.
What I have learnt over the summer at the tables of George, 5 Hertford Street, Scott’s and Alfred’s (in the Dunhill private members’ club) is that, when choosing their advisers and asset managers, HNWs are often drawn to those who have ventured out on their own to found successful boutiques after frontline experience working for a major bank, law firm or estate agency.
The reason is that HNWs are often themselves ‘outliers’ who have become wealthy by seizing opportunities — whether digital, financial or retail — where larger institutions have remained in the slow lane. What I’ve also noticed is that the most dynamic and the busiest, whether you are a Mayfair property guru like Peter Wetherell (always immaculate in his Hermès ties and navy blue suit with coloured silk lining) or are launching a new reputation and privacy unit at a law firm like Charlotte Harris of Kingsley Napley, are the earliest risers, the most driven, the happiest and — despite their busyness — still have time for a two-hour lunch.
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An unscientific truism of the wealth management world — at least based on my research — is that those who dress with the most confidence, flair and style and who lunch the longest often are the most successful in HNW beauty parades. To put it simply, they are also brilliant salesmen and women — as well as experts in their field.
Another trend is that they don’t tend to talk much during lunch about themselves or even their business. What they all have is common is not an obsession with making money but an obsession with ‘connecting’ with the elusive HNW mindset — and that almost always means remaining client-facing, even if they are the CEO, MD and chairman rolled into one.
Somehow the most successful and hardest-working individuals seem to have more time than their rivals — to juggle multiple lives. Daniel Pinto, for example, is the CEO and co-founder of Stanhope Capital, with over $10 billion under management; he could easily afford to sit back, write another serious economics book and let his team deal with his clients. (His last book, Capital Wars, was written in his study after dinner every night from 9.30pm to 1.30am. It was a fascinating insight into the way that the ‘casino-style’ financial model of global banks — left unregulated — was simply not aligned with the interests of clients’ money.)
But he doesn’t leave his clients to others. Pinto told me over lunch — scrambled eggs and truffles — that he is still involved with ‘around 40 per cent’ of clients personally. That is why we publish The Spear’s 500: the wealth management business is a ‘people business’, with an HNW’s choice of private banker or asset manager being every bit as personal as any other decision they’ll make. If you don’t enjoy your clients, get out of the game.
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Spear’s is glad to see that David Cameron is finally set on unmasking corrupt offshore companies — often vehicles for using plundered and laundered cash from UHNWs abroad — that have been buying up expensive London properties and helping to keep the value of super-prime London excessively high. Yet I am worried that George Osborne may have the wrong areas of London in his sights when he says that property such as Mayfair — and to a lesser extent Chelsea and Knightsbridge — is the target of this dirty cash funnelled through companies (which will now be required to declare who their owners are).
When I interviewed the king of Mayfair estate agents, Peter Wetherell, for The Spear’s 500, I asked him if he thought property there — which his firm has sold £750 million of in more than 30 years — had been targeted for money laundering. He was emphatic that Mayfair was not on the money launderers’ target list, despite the average pounds per square foot value of property there having risen by 196 per cent since 2004.
The main reason was that Mayfair was too much of a village; there was such a low volume of sales these days — just a dozen or so transactions in the first quarter of this year, largely thanks to the pre-election hike in stamp duty — that it wasn’t a fast enough market for money launderers. Launderers were more likely to target new developments in East London, where the ‘know your client’ mantra is not so enforced.
My favourite statistic provided by Peter in showing what makes Mayfair truly unique — and why it can call itself the natural home of the cosmopolitan rich — is that over 55 per cent of rented properties and 52 per cent of owned properties have just one person living in the house or flat. Even more revealing of the high level of concentrated wealth in Mayfair is that 12 per cent of these single-person owner-occupiers ‘boast properties that have over four bedrooms’. Sounds like a great opportunity for a HNW version of Airbnb, as Ross Clark explores in our latest issue.
