Episode 48: Wealth Management, Robert Morse: The Private Office
In Episode 48, Caroline talks to Robert Morse, a partner with The Private Office. He is an independent wealth manager, investment adviser, financial planner, and investment and 0ensio specialist. The Private Office operates as a Family Office for those families who do not want to set up their own Family Office or if they want to use the expertise in appointing the professionals they may require from time to time.
Episode Transcript
00:00.00
carolinesclub
This is episode 48 of how to keep your money I'm Caroline Garnham a private client lawyer specializing in international trusts and succession planning and a pioneer in family governance I set up Caroline's club as an interdisciplinary club of private client professionals. Where networking works. It's a space where we can listen to learn from and connect with the professionals we would like to work with I'm joined remotely by Robert Morse a partner at the private office and independent wealth manager investment advisor financial planner. And investment and pension specialist. Robert welcome welcome to how to keep your money since your expertise is about money. Let's start with how you in the family office services section of the private office make your money. You say your first meeting with a prospective client is free. It's a discovery meeting when you explore how you can add value through planning or wealth management if you discover opportunities to add value. You draw up a scope of work and your fees are fixed and non-contingent based on time risk. And complexity you charge for your advice not assets under management Robert why.
01:22.32
Rob Morse
Ah, thank you? Caroline? Um, so why I mean fundamentally, it's um because we wanted to be very different to the rest of the industry where very often the cost or the charges they're making are simply for gathering assets. So. Fundamentally the family office proposition is where we work for the client and we try to remove as many conflicts of interest for us as possible. Um, so you know we can put together a highly experienced team of chargers financial planners. Their job is to work collaboratively and advise based on as you've said time risk and complexity. But and this is the important bit not necessarily volume. So what do I mean by that you know someone investing £5000000 is not half as you know. Sorry I should say the other way around someone investing £10000000 is not twice as complicated or risky as someone investing 5 and we feel that needs to be reflected in how we charge and we're trying to move away from that advaloum model and offer fixed fees wherever that's feasible. And um, you know I think the other thing is we're very happy to you know we're we're looking for long-term relationships with people but we're set up in such a way that we can do 1 ne-off pieces of work. So if someone comes along and says I've got this problem.
02:50.74
Rob Morse
Lia with the tax Advisorr or the bank or the lawyer whoever it might be and outline some things which complement what they're already doing that might but just be 1 off and they go that's fantastic I'm pointing in the right direction it costs x pounds and they go off happy is anything and then the next person that we meet. Might actually want someone who is much more involved in holding their hand and I think the key thing what we've tried to move away from is sort of having a suite of products and you know we all know that we've had this experience where you walk in and the answer is 1 of 3 things because the institution you're dealing with have 3 things and they want to sell them to you. And we just wanted to move fundamentally away from that and the only way to do it is to work on the basis of firstly spending time with people to understand what it is. They're trying to achieve listen to them understand you know what kind of risks are appropriate for them and. Very often as you know within a family you'll find that 1 partner makes all the decisions but actually the other one may feel deeply uncomfortable about just how much thought has gone into those decisions. So the art of our job is often to make sure they're both happy. Um, and as I've said you know it's to work with the other professionals who. In many cases. So certainly if it's a new client. That's just come to us. There'll be someone almost certainly someone who understands them and has known them for a long time. We want to be able to kind of brain dump that knowledge and then use that to benefit the client though. That's why we start with? let's understand you see how good we can have value.
04:25.14
Rob Morse
And then have an honest conversation about what the service that would add value looks like um.
04:29.18
carolinesclub
I think that's splendid Robert um, in the last twelve months you have been shortlisted for the magic circle wards chartered financial planning firm of the year by your professional body. The pfs.
04:44.12
carolinesclub
Citywide named five of your advisors top 35 next generation advisors your firm is in as in the top 100 financial services firm. Your women are highly commended in the financial services awards tippoio has also won numerous awards for best company to work for. And it ranks number 23 in the financial times top 100 financial advisers. Wow Robert I'm surprised, you're not blushing. You must be doing something right? Ah, can you tell us what you think this is.
05:17.60
Rob Morse
Well I am blushing but let's be clear. It's not me. It's lots of lots of other people. Um, it's a combination of things so teamwork. Yeah, we are not a neat what you kill firm we have We have a collaborative mentality and I think that.
05:20.53
carolinesclub
Ah, that.
05:34.35
Rob Morse
Is What other people are recognizing Um, we look different So It's probably a decade ago that we made the decision to invest heavily in the next generation we have an academy where people can come in either with some industry experience or they may have gone through our graduate program. So They're effectively completely new to financial services and bear in mind you know for us and for the clients I think it's really important that what they're getting is sustainable. The average age of a financial advisor is 58 and the average age of a private office advisor is 35 Um, And you know so Academy graduate program. They all require both financial. But also you know a lot of time commitment and investment. So We we did that but from a selfish point of view I mean I have to say it's great working with. Lots of younger people. They're Dynamic. They're interesting. They've got capacity. They see the world slightly differently and and it's given us the opportunity of putting teams together in front of a client who can you know? Sadly I'm at the wrong end of of the demographic and I'm the one with the gray hair these days. But the client can have that combination of energy enthusiasm capacity and and frankly, that's what's been reflected in those awards because there's some great people.
06:59.58
carolinesclub
And you mentioned about um, a great place to work. You obviously have consideration for you know your younger staff and all staff altogether.
07:08.79
Rob Morse
Um, yeah, Ah, yes, we do I mean I was I was always brought up not to sort of blow your own trumpet but the reality is the decisions and this is this genuinely isn't made. This is you know our executive in our board. But for example in furlough we didn't furlough anyone. Um. We knew we needed to be there for the clients. You know some of our competitors were doing that because let's face it. It was a very scary moment in our lives but it was in short we we made a commitment to those people and actually. Ah, our people team spent a huge amount of effort making sure that people were genuinely okay because suddenly you had lots of young people stuck at home often with a young family in a small space. Um I'm slightly older. We're very Lucky. We've got you know a live out on the countryside. But you know that isn't the case for many of our staff.
07:47.76
carolinesclub
Um.
08:01.57
Rob Morse
And I think um, we're doing that because it's the right thing to do but it also has a very positive outcome. It's the right thing to do because it actually makes people happier and more you know more able to do the work that we're asking them to do I think it's it covers.
08:18.80
carolinesclub
Um, in my career I've worked with numerous clients who have recognized the need to engage various services but feel ill-equipped to pick and monitor the professional services they need.
08:20.20
Rob Morse
Ah, size things.
08:33.58
carolinesclub
So These wealthy people set up a family office with professionally qualified staff who engage and monitor experts for the services and products. The family requires the private office provides a similar function through its family office services team to which you belong. It brings together specialists in the market in tax. Legal banking in investment management and accountancy which you've already alluded to to optimize outcomes for your clients tell me more about this service and how do you choose the professionals with whom you want to work.
09:10.84
Rob Morse
That's a really good question. Thank you? Um, we think of it as a a jigsaw and the private office might only be 1 to possibly 3 pieces of that jigsaw? Um, but we know. For the jigsaw to be complete for that picture to be understandable. You need all of the pieces of the jigsaw to be there and that could be the lawyer banker tax advisor asset manager and now you know they all need to be brought together in many cases, you know some pla families will employ directly. But we're able to create a more virtual offering and I think unless you're really really wealthy. There are some significant stumbling blocks in in doing it all in-house. Frankly, so if you want the best people in each area. Um, you want someone who does it all day every day not just. Once in six months because you've decided to buy you know a yacht or a you know property in a particular jurisdiction. For example, um, and I think it's I mean to be honest, it's very rare that a family doesn't have some of that in place already. You know it's it's not often over an entrepreneur who's had a capital event or. You know a landed family haven't already got certainly lawyers and tax biases and we work with them and there are occasions when sometimes the family have outgrown what they've done historically that's more often true with say an entrepreneur very often entrepreneurs haven't been.
10:42.22
Rob Morse
Particularly wealthy until they get a capital event until they actually realize the value and but that's an art because you you don't want to tread on anybody's toes. But at the same time What we can bring for the family is the basically the opportunity of saying other people we work for have done this. Or they've approached it in this particular way they feel. It's very important that you have um, you know, discuss this between the generations which you don't appear to have done so we can share our experience without in any way giving away any confidences. Um, yeah, So so I think yeah, that's I mean. The other thing is because of what we do. We do work with some really good professionals and you know where they have the ability where they've got the capacity. We would be very happy for our clients to use them as well. So You know it's kind of sharing best practice really and sharing good people.
11:34.34
carolinesclub
Brilliant your clients you say range from families to enterprising entrepreneurs and business owners give me examples of your client the sort of client the concerns that you that clients come to you with and how do you assist them.
11:53.88
Rob Morse
Ah, that's an excellent question hard to answer because actually pretty much everyone is completely different so they'll they'll have some similar challenges the obvious one will be transferring wealth through the generations and very often 1 generation of have made. Money or they've they've inherited money and protected it and they want to hand it on but they also want to protect the interests of everybody concerned so you know that's a significant challenge and trying to get. We've got some families where you may have 1 kind of it is often a sort of. Super Alpha male who wants to call all the shots and there are contradictions between what they want to achieve so they want to hand on the wealth but at the same time they can't let anyone else make any decisions about anything so some of that is just it's a sort of um, getting people to see the big picture and. And outlining ways that people have addressed those challenges I think that's one of the hardest because it's it's very often that Jen went so so recently thinking about farming family where effectively Gen one and would like the farm to continue. It's got family name on. It's been in the family for hundreds of years. Gen 2 and 3 don't want to farm um and the funny thing is it's not so much the financial solutions that were interesting. It's the fact that they're just not talking to each other so it's trying to get people to discuss what they really want to achieve and what matters most.
13:09.86
carolinesclub
Um.
13:23.14
Rob Morse
And then make some decisions which may involve some buying or some tax or whatever it might be but very often. It's just making sure that everybody's interests are both understood and as best you can aligned so that's that's an obvious one another recent one. Um, someone who's got a perfectly decent asset manager. But just.
13:35.78
carolinesclub
Um.
13:43.18
Rob Morse
Felt a bit out of their depth had lots of Jargon Lots of technical terms all the time. Very smart people turning up to tell them.. It's okay, you know they've done this and that's Good. You know they've done that and that's good as Well. Um, and we kind of act almost like in Loco apprentice where we can have a much more robust conversation. Um, in some cases we send in our own risk analysts and investment specialists and say let let's look at what they're actually doing is our client receiving value for money for the fees that they're paying um and I mean very often. It adds massive value to the client because you can have a conversation where we had. We had ah a. Some years ago where there was nothing wrong with any of the investment portfolios that were being run but it was almost as if someone had shuffled the cards and from ah from a tax perspective. The different portfolios were all in the wrong places so they had a trading business ah an investment company personal assets. And tax tax enhance rappers and pensions and trusts and it was almost as if someone had gone. Do you know what? I'm going to put all the stuff that's as tax inefficient as possible in all the wrong places. So in that case, we kind of just went Well this this thing is taxed in the particular way and therefore portfolio a should be in it. Whereas at the moment. It's got portfolio of D in it. So again, it's having I think it's the benefit of having some perspective and um, starting with a King piece paper asking people What they're actually trying to achieve what's the money for what's the what's the purpose I think that's very important.
15:01.84
carolinesclub
Um.
15:14.93
carolinesclub
I think that's a breath of fresh air Robert if I may so so over the years you say you've cultivated expertise in the media and entertainment industry specifically catering to the distinctive needs of high profile individuals and their families within the music realm.
15:19.97
Rob Morse
Um, will.
15:34.69
carolinesclub
You say there are challenges that arise when the client is a cherished household name tell me more about these challenges and the solutions you've come up with without breaching client confidentiality. Robert.
15:45.27
Rob Morse
Um, sure I think the biggest 1 is understanding the psyche of people in that situation because very often and the kind of names that you you know anyone would think about very often. They've made money very quickly. Um, they're a very small percentage. You know it's an industry where you're probably millions. It's certainly tens of thousands of people are aspiring to be that you know actor or artist or whatever it might be um and there's only a tiny handful that ever make it and then there's an even smaller handful that make money making it. Um, so I think it's understanding and then it's also understanding that they don't think it's going to last you know, even we we we do look after some people who've who sort of had a successful career for decades but they still think it's going to no one's going to be interested tomorrow. So it's it's.
16:35.42
carolinesclub
Um.
16:41.91
Rob Morse
It's very much again about understanding those fears and addressing them properly rather than just coming at it with the sort of traditional wealth. Industries's jargon and this is where you want to put your money. So I think that's part of it trust as well. Um, a lot of them are taken advantage of and you know. You've got to be very careful about any kind of generalization but very often. They're very good at what they do, but they don't necessarily get anything. We do someone Um, who who would fit in this category said to me many years ago it was one of those brilliant moments I don't about you I've I've learned more from my clients than I've ever told them I think. Sort of come away going. That's brilliant. She said to me we were discussing something um, which I I think might have been about a pension fund of some sort and she ah can of stop you robert ah is this are you talking about numbers on bits of paper.
17:38.17
Rob Morse
And I sort of had to stop for a minute because I was so into it I thought oh ah, well yes I I suppose I am sort of I should the trouble is Robert if I can't eat it or touch it or wear it. It doesn't feel real to me I don't get it. It's not real and.
17:53.42
carolinesclub
What.
17:55.99
Rob Morse
Yeah, and it's that it's so I think look they're not.. It's not that they're so different to everybody else. It's just that very often. They're surrounded by people who are kind of riding their coattails and that whole trust thing is ah is a massive issue and that means that um, we need to make sure that our staff don't ever act. Sort of starruck Manner. You know the service has to be more impeccable than ever. But I'm trying to get that balance mean remembering as well that we are the paid servant of the client you know, never overstepping those bounds. But um, yeah, and then just oh you know you've got to.
18:18.22
carolinesclub
Um, to.
18:27.70
carolinesclub
Okay.
18:31.85
Rob Morse
I Feel that most of the people on on on your podcast I'm I'm teaching granny psyics but it's it's about ensuring that discretion is absolutely key.
18:38.81
carolinesclub
So you really do say what they people encourage to say do you really do walk in your client's shoes or at least try to which I think is.
18:49.90
Rob Morse
Um, try to I'd I'd add to that as well, especially with entertainment the other thing which um, we're very fortunate because not everyone can do this but a lot of people who've been successful will have us connections and again as many of your audience will know that creates significant complexities which. You you get 1 or 2 reactions often in the Uk. So where people are sort of living here or they've got a historic base here or they're coming back here all the time people either just don't understand it and ignore it and pretend it's non problem. Um or they go. That's a bit complicated. We can't help you so.
19:21.24
carolinesclub
Um.
19:22.60
Rob Morse
But you know and again that that creates its own peculiar challenges where um, we had. We had a family recently where dad had actually made significantly more money than any of the family really realized you know that they were perfectly. Well-to do but not on the scale that was was actually the case and he put money aside for all of his kids. Were now adults in their own right? and then sadly he passed away young and they discovered that he'd given them all this money. Only one was based in Switzerland with one particular set of rules and regulations which had totally been nickmor for years because they didn't know about it 1 is um, you know. Had buried someone from the states taken a green card and you know and had american kids and again had never been mentioned because she didn't know that dad but you know basically settled all this money on them. Um, so you know it's it's it's being able to sort of take a. Deep breath and go right? Okay, let's work through this. Let's work out what the challenges are who do we bring in knows how to deal with this stuff and make the problems go away which I think we did.
20:29.14
carolinesclub
Well done well done. Ah, you say that you have lent your expertise as an expert witness in cases concerning disputed investments leveraging your knowledge and experience to provide invaluable insights. Can you give me some examples.
20:45.32
Rob Morse
Um, certainly um, ah sadly these have generally involved some sort of misselling where the claimant wants to understand what a reasonably competent advisor should have done and what the outcome should have looked like and. I mean we did some work on the so-called mini-bon saga I don't know if you recall but 1 of the most the largest one which wasn't the one we were doing the expert witness work for was London and Capital Financial Finance so as an expert witness. It's your duties to the court. But you tend to be engaged by 1 of the parties. So with which again you just need to get your head around that that you're not there to to represent the claimant. For example, you're there to tell the court. What a reasonably competent advisor should have been doing what they should have been looking for and did they breach regulations for example, um. And what was he going to say on that you know the the benefit I think is that as active practitioners we can kind of see how these things have come about because very often it doesn't start as I mean so mini bonds were were an example where they were promoted as low or no risk. Because you effectively you're putting your money away for say 5 years and you're getting a 7 or 8% return now at the time of the when these were really being heavily sold that was significantly more than you'd have got from deposits. For example, you know multiple times more.
22:12.81
Rob Morse
But they were presented as being low risk because the the deal was well. They're secured on an asset You're definitely going to get your money back in 5 years time and then unfortunately what people discovered was that the assets on which they were secured were pretty much worthless or indeed in some cases had apparently disappeared so we don't know what they were worth. Um, for me one of the I mean apart from the fact that it's a great intellectual challenge to try and work out. What's actually been going on and had it. It happened who was involved you very often find that there were sort of levels of um, the same people were involved throughout so someone was distributing it but then they were also a director of the company that was aggregating the money. And then they were also a director of the company which was securing the you know the finance somewhere else and it's like well that's an odd. Why? Why are they involved at every level oh because they've been paid 4 or 5 times. Basically um and it's a good lesson I think because. Many of the certainly the advisors that were being sued in these examples probably didn't start out doing anything wrong and actually in 1 or two cases I think you would argue they didn't do good enough due diligence. Yeah, 1 of 1 of these companies when you when you kind of checked where everything was based. It was a fish and chip. It was an office above a fish and chip shop in back street in cardith and i' know about you but I'm probably not going to be giving hundreds of thousands of pounds of my you know hard save money if that's their registered office. You sort of question. Some of the basic due diligence being done but it kind of started off.
23:33.26
carolinesclub
Um.
23:46.67
Rob Morse
As 1 thing and then gradually over time people were taking advantage and morphing it so that by the time you get to the point where it's all failed. It just wasn't what was being represented a couple of years ago um so it's it's both valuable and as I say sort of salutary lesson for practitioners to just go never stop. It's the old cliche isn't it. It's you know if it's too good to be true. It is it. It holds true. It just does.
24:10.30
carolinesclub
Um, we've seen that so many times haven't we um I note from your Linkedin page that you're a member of the country land association and have been a governor of a school. Tell me little about these interests and any other hobbies or interests you may enjoy in your spare time.
24:30.79
Rob Morse
So The the the governorship of the school was was it was a joy and very very stressful. It was ah it was a prime ah prep school so they never have enough money. It's always kind of slightly hand to mouth. Not all of them but certainly in the north of England where I live it's There's more that ah I just sort of getting by despite all the odds so it was It was great, fun and the the people were lovely. It was ah it was a great privilege to be able to sort of ah hate saying it. We put something back help helps other people out. Um, lot of fun and and it's still going strong so that can't be said for all of the schools in my area so that was positive lots of as I say lots of fun. There were some moments which you just you know because.
25:22.84
Rob Morse
Because all of these institutions are small charities. They're not making huge sums of money and the attitude of some of their clients is quite bizarre you know you know there are quite wealthy people who do who think that paying for stuff is an option which again I found one of these life lessons. Yeah, people's wealth and their desire to pay for things is not related. As far as I could make that goes early. Um, so that was a lot of fun and you know met lots of interesting people made some friends and other things I mean I you know we live out in the country salad I Do Love everything you know everything country related So You know I I do shoot my sins. That's a huge joy. Get to see the countryside in a way that you you otherwise don't and I do I understand it's not everyone's cup of tea I get that but actually the British countryside would not look like it does if it weren't for some of those activities. Yeah, and the sheer number of people that are involved and take pleasure and joy out of one of those days out is is.
26:14.48
carolinesclub
Um, and.
26:21.19
Rob Morse
Great, fun and then yeah and then I spend the rest of the time just sort of trying to stay fit enough to be able to carry on doing the things that I do I always joke about it I sort of I do run a bit and go to the gym and what have you but it's it's slow running and I'm in the gym to make everyone else feel better.
26:38.16
carolinesclub
But.
26:40.26
Rob Morse
Yeah, there's before and after photos. It's just so that someone's always got a before photo to reference they go Oh I could look like him. Ah.
26:47.97
carolinesclub
But well I must say I go to the gym with much the same attitude I get real look fantastic. Um I must say Robert it's been a pleasure to talk to you today. It's been interesting to hear your passion.
26:54.91
Rob Morse
Um.
27:02.70
carolinesclub
And concern for your clients and your different way of doing things which I think is ah as I say a breath of fresh air many private client firms claim to provide holistic service. But in reality they bolt on additional services and departments to provide a 1 ne-stop shop
27:09.52
Rob Morse
Are.
27:20.10
carolinesclub
My psychology background which I share with our cbcb members a 1 ne-stop shop will only appeal between 1 to 3% of prospective clients regardless of how diverse those those services may be but a panel of carefully selected independent professionals. As an aggregate of the best in the market is more likely to appeal to a whopping 38 this is the philosophy behind Caroline's club and it is a pleasure to know that we are not the only professionals to think so and in your case won so many awards. Robert once again. Thank you for joining us today if you listeners would like to find out more about our club and our Cpcp program go to our website. Caroline's Dot Club and get in contact I look forward to hearing from you and thank you Robert again for a very interesting half hour thank you
28:14.72
Rob Morse
Um, well no thank you Caroline and thanks for asking me and so for some great questions.
28:18.16
carolinesclub
Good. Thank you.
