Fifteen years later, Mr Wake reacquired an asset-stripped Stafford House Investments for a modest £2 to resume an adventure that started three decades ago. Since its official relaunch in 2012, the Somerset-based company has made headlines for its rapid development. First it merged with Rowan Dartington, the investment management and stockbroking company, and then just recently it acquired the financial services arm of AC Mole & Sons, the same firm that Stafford House Investments was originally set up in conjunction with.
As far as Mr Wake is concerned the sky is the limit, both in terms of how the advisory market is developing post-RDR, and for the ambitious expansion plans that Graham Coxell, Rowan Dartington’s executive chairman, is happy to finance.
“We have increased the number of advisers we have by 60 per cent in the past three months. Our long-term strategy is to build a 50-strong adviser team and Rowan Dartington is totally supportive of our growth plans,” said Mr Wake, Stafford House Investments’ chief executive.
“I am looking for good IFAs that have good client banks. Geographical issues don’t matter much. We are looking for additional businesses that we can develop using the same business ethos and we have a very supportive team in Rowan Dartington and specifically Graham Coxell, our chairman.
“It is our intention to build organically and acquire other firms if appropriate, and currently it is a good moment for takeovers and acquisitions. IFAs are finally realising the true value of their business and there is now a more realistic understanding of what these companies are worth.”
While Mr Wake is not willing to discuss any specific acquisition plans, he did confirm that he is currently in talks with several businesses. He also added that that he has recently been approached by several financial advisers who would like to work for the firm and that this could lead to setting up a separate office.
In short, the RDR has been a blessing in disguise for the firm. Because Stafford House Investments was relaunched just before the regulatory changes came into effect, Mr Wake, and his then team of three advisers, found it easy to adapt and did not have to worry about any legacy issues.
He said: “The RDR was extremely good for the industry. It has cleaned it up, removed people who perhaps were better out of the industry, and has improved the overall standard of advice.
“Though the industry was already very buoyant, I think there are now even more opportunities in the current marketplace, particularly as the banks and building societies withdrew from the provision of investment advice. The opportunities are also significant as the number of IFAs has shrunk. From our point of view it removes a chunk of competition, though it is not necessarily a great thing for the rest of the population.”
Despite being a good thing for his business, Mr Wake is concerned that the RDR will leave the majority of people priced out of professional financial advice. Stafford House Investments, he claims, is now profitable because of the quality of its clients, who on average have an investment portfolio of around £200,000.
He said: “What concerns me now is how the man on the street is going to get financial advice in the future. Banks and building societies may have previously offered questionable advice, but, as far as I am concerned, mediocre advice is better than no advice.”
Mr Wake expressed concern that the advice gap conundrum will not disappear and has urged the adviser community to build suitable models online and the government to push for education reforms that would see financial advice being taught in schools.
“I think there will be a trend where younger people will have access to online tools to invest and save through platforms. I also believe, however, that the problem will be apathy and distrust of the industry. The answer has to be education at an early age and the industry developing awareness and confidence in the way it operates.”
Like many of his peers, Mr Wake anticipates the industry becoming smaller and more professional in the next ten years as the effect of RDR fully sets in. This, in turn, he says, will trigger the development of an alternative service for the mass market, which could see a return of the direct sales force.
“I think insurance companies are facing major changes, and if they want to maintain their levels of business they will have to do so directly to the public. In my experience in the 1960s with industrial branch insurance, the point was that most people who started saving with the man from the Pru wouldn’t have saved the money without him. At least these people had a life insurance policy and a means of saving,” he said.
While many will not be satisfied with this potential return to old customs and switch from advice to sales pitches, Mr Wake believes it is better than nothing. The RDR and the regulatory costs that accompany it, he said, has forced the advisory industry upmarket and the mass population may now have to settle for no form of financial advice.
“Unless the IFA community can build suitable models to deal with the large proportion of the population impacted by these changes, no advice is exactly what they will get.”
Daniel Liberto is a features writer of Financial Adviser
Mr Wake’s Career Ladder
2011: Stafford House Investments
Re-established SHI with Rowan Dartington.
2000-2010: Rowan & Co Capital Management
Appointed managing director and then, in 2006, became chairman. After two years as chairman, however, he returned to his role as managing director
1983: Stafford House Investments
Founded his own company in conjunction with AC Mole & Sons
1973 - 1986: Property Growth Assurance
Broker consultant for three years and then became the South West regional manager
1970 - 1973 Norwich Union
Broker consultant
1969 - 1970: Refuge Assurance
District agent
