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Profile: Magnus Spence - there are conflicts of interest everywhere you look

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by Elsa Buchanan on Mar 10, 2014 at 09:48

‘The business, which is integrated with institutional quality investment management teams and funds is a great model, despite being out of favour,’ he says.

‘In 99% of the cases, wealth management firms want a third party fund selection team, which will spend their whole time looking at US equity funds, but automatically end up invested in the Threadneedle or Findlay Park funds.’

He continues: ‘They [the fund selectors] do all the work, but you know where they will end up.’

However, looking back to when Dalton died, there were concerns his passing could have put the brakes on the wealth management business.

‘I recognise Andrew was really the driver of our wealth management business, and we lost some assets because of the relationships he had with clients – but it was completely understandable,’ Spence says. ‘We had lost our managing partner and the firm’s chief investment officer of the wealth management side.’

He admits the question of selling up was raised. But despite having received offers by outsiders to buyout the business, Spence insists that he always considered selling to be the wrong move.

‘For me, that means making money on the back of our clients. Is selling your clients into someone else’s world they know nothing about the right thing to do? Selling clients’ goodwill never crossed anyone’s mind.’

This period of uncertainty seems to have pushed Spence to re-examine his opinion of the industry.

‘I think private asset management companies are the best structure to manage wealth. If you look at very great partnerships of the likes of the Swiss private banks, the Pictets or Lombard Odiers, they have succeeded because they were able to take a long-term view, and at no point in time, have they ever said “let’s try and monetise the goodwill of our clients”,’ Spence adds.

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