St James’s Place celebrated its 15th birthday last month with £15bn of funds under management and a market capitalisation of £2bn.
Mike Wilson co-founded the company in 1992 and he says his duties as group chairman take up about half the week but the rest of the time he spends doing what he really wants to do – improving the quality of the sales process.
Wilson has had a long career in financial services. He started as an 18-year-old quotes clerk at Equity and Law in Bournemouth. after leaving school without any A levels. By 21, he had become the firm’s youngest ever broker consultant and then moved to to London to join Abbey Life where he first worked with Sir Mark Weinberg.
Wilson moved with Weinberg when he set up Hambro Life in 1971 and stayed there through the takeover by Allied Dunbar, becoming group chief executive and taking a seat on the board of parent company BAT.
In 1991, Wilson and Weinberg left to set up their own financial services company, J Rothschild Assurance.
Wilson says: “Jacob Rothschild always said if Mark Weinberg and I wanted to start again he was interested in backing us and that is how J Rothschild Assurance was born.”
He says being able to start with a clean sheet was a wonderful opportunity. “J Hambro/Allied Dunbar was a fabulous company, don’t get me wrong, but you think what would you do differently if you did not have the baggage. For example, we knew the back office had to be very good and service had to be very good but you start analysing, can I give added value or can the management team give added value.”
Wilson credits the management book, The Age of Reason with the inspiration for the decision not to do their own back-office admin or their own investment management. Weinberg was sceptical at first but he was persuaded by the idea that management should stick to what they are good at.
“Management should focus on where they should give added value. No one business excels at every aspect. “We understood distribution, having run our own salesforce, so we thought we could design products and give added value but we were not investment experts.”
The company became in due course St James’s Place and the outsourcing of investment management means the firm has no conflict of interest when recommending funds.
Wilson says they were called a virtual life company when they started and it is being able to concentrate on one thing that has made the company a success.
“If there is a single factor why we have been successful, it is the quality of the St James’s Place partnership, which is our dedicated distribution channel.”
When they set up J Rothschild, they insisted on recruiting only high-quality, experienced candidates at a time when many firms were axing their salesforces.
Wilson says the demise of salesforces and the emergence of big IFA networks have been among the biggest changes he has seen and he believes many of the networks have proved not up to the job.
“Bluntly, they have clearly proved they are not viable business models. I think it has been the danger of people chasing size rather than, at the end of the day, the only measure of success of a company from a shareholder’s point of view is how profitable you are.”
Wilson says regulation has been the biggest single influence on the business but some people do not help themselves with their attitude. “My attitude is you play by the rules. If they have changed the rules of football or rugby you either give up playing or you play by the new rules.”
He puts a lot of his success down to his long-standing working relationship with Sir Mark Weinberg.
Their working partnership has lasted 39 years and Wilson says they have concentrated on doing what they are good at. “We worked as a team. He was chairman here and I was chief executive but we had never really allocated out roles. We just said, play to strengths, who is good at this aspect, well you do that.”
Wilson says he has not taken on the role of chief executive after the sudden departure of Mark Lund last month. David Bellamy is looking after the day-to-day running of the company and Wilson says they are not going to rush the appointment of a replacement for Lund.
“It is far more important to find the right individual rather than rush an appointment. We want to be extremely careful that we get the right person.”
To grow the business, Wilson spends a lot of time helping to recruit new partners and assisting existing partners grow their individual business.
For half of the week after he has fulfilled his tasks as chairman he works as a coach for different parts of the business.
This helps him keep in touch with what is really going on in the business. “If you just sit in an ivory tower and just listen to what you are fed by management, I think it is quite dangerous. Do you really know what is going on on the ground floor?”
St James’s Place had a particularly strong year last year on the back of very strong pension sales and while Wilson doesn’t expect this area to be as strong this year, he says it will be good across the range of the business.
Wilson says it is important to have goals for the business and to know what you are good at. “When seeing investors and analysts in the old days, the question Mark Weinberg and I always dreaded was ’In three years time, describe your business.’ And we would always look a bit sheepish and say we think there is a big market in the UK for wealth management, we want more high-quality advisers, expand our product range when needs be and grow the business at a very healthy rate.
“Although it sounds a bit dull, the analyst would always say ’What a relief, we’re sick of companies coming in here and saying the strategy this year is protection, then it’s multi tie…”
Born: Plymouth, Devon
Lives: Belgravia, London
Family: Daughter and two granddaughters
Education: St Edward’s School, Oxford
Career: 2004 to date: chairman of St James’ Place Capital; 1992-2004: chief executive of St James’s Place Capital (formerly J Rothschild Assurance); 1988-90; group chief executive of Allied Dunbar; 1985-90: director of BAT Financial Services; 1971-85: joined as London area broker manager and became joint managing director of Allied Dunbar; 1968-70: broker manager at Abbey Life; 1963-68: quotes clerk at Equity and Law.
Likes: People, travel, sport (supports Chelsea FC), business and competition generally
Dislikes: Negative or pompous people
Favourite book: Long Walk to Freedomby Nelson Mandela
Favourite film: The Full Monty
Favourite band: The Rolling Stones
Career ambition: To leave St James’s Place in great shape – no immediate plans to leave
Life ambition: To add value to the lives of my family, those at St James’s Place and those less fortunate than myself
If I wasn’t doing this I would be… A barrister