The greatest change Richard Whitehead has seen in the wealth management industry in the past years is his own transformation from a feisty young professional to a tranquil boss.
'Look at how much I’ve aged,' he says, waving a copy of his 2009 cover star interview with Wealth Manager, though it is not just the slightly deeper laughter lines he is referring to.
Looking back, Dart Capital’s chief executive now feels some sympathy for the managers charged with handling him in his early career at Chase de Vere and Coutts, and admits his drive often led to unproductive clashes.
Work was fiercely ambitious then, he says, and everyone working in large corporates was desperate ‘to get up the greasy pole of promotion’.
But leading the 2008 buyout of Dart Capital’s business from IFA James Baxter Capital Management, was a critical formative experience which left him a changed man.
‘I went from being an employee to having control of my own destiny,' he says, 'and all of a sudden I realised that I was responsible for the careers of people double my age with far more experience of the world than I could possibly have’.
He decided to learn from his past experiences of workplaces characterised by aggressive careerism and populated by people who viewed consensus as weakness, and follow a different path. Without lessening his ambition, this duty turned him into a calmer person, able to focus on the longer term.
Whitehead is not the only one of the company’s founders who has recently been reflecting on his path over the past decade. Two longstanding members of the business, collectively holding more than 50% of equity in the business, decided last year was the time to cash out.
Matthew Wille, a director of Dart until May 2017, followed his dream of launching a Latin-American restaurant and was duly followed by his godfather, key-cutting and shoe repair magnate Sir John Timpson. Whitehead stresses Timpson was ‘absolutely key’ to supporting the 2008 MBO.
They were replaced by 25 new stockholders, all of them clients of the business and largely consisting of current and former PwC partners. Collectively, they invested £4.6 million.
While sorry to say goodbye to two formidable colleagues, Whitehead says having client backing has created its own sense of renewal. It has also given people who may have previously had a largely passive relationship with the business a greater sense of agency and empowerment.
‘The clients that bought into Dart have more interest in the business now and they are bringing in more new people – we have them doing our marketing.’
In as much as he is looking back, Dart is also assessing where he is and planning where he wants to go. So where does the company stand, almost a decade after Wealth Manager initially profiled it?
The wealth boutique now manages some £500 million assets on behalf of 420 clients, some of whom have been with Whitehead for much of his career, and none of whom originated with third-party financial advisers.
Charges stand at an annual 1% and a previous hurdle of a £250,000 minimum investment has now been relaxed, with the firm permitting younger relatives of its clients to open their first portfolios for sums as small as in the double digits.
‘Contrary to what some may think, there is absolutely no evidence from my growing business that relationship-based advice is dying. We have many younger clients that are equally as enthusiastic about trying to manage their own portfolios as their parents and grandparents,’ he adds.
He admits, however, that apart from prospective sizeable accounts, this younger generation also presents the main source of the firm’s annual outflows: some £18 million a year is withdrawn from clients’ accounts to pay for weddings, university fees, gifts and so on.
Spending four hours every day travelling from his home in south Hampshire to his City office and back again ensures he wants to make being at work fulfilling both for himself and his 18-strong team. ‘A few months ago we took the entire staff skiing and everyone came back with renewed enthusiasm after that,’ he says.
Maintaining a good office atmosphere has over-ridden any urge to purchase growth. Whitehead is sceptical about forced marriages as a shortcut to expansion. Based on his personal experience, he believe proper integration cannot materialise when buy-outs happen under pressure.
Five years ago he acquired advisory firm Waterson Jones, which had £150 million in assets under management (AUM), around 100 clients, and two staff.
The majority of the company’s clientele came from PwC, where Dart already had strong relationships with both current and retired partners. Despite this client overlap, Whitehead says integration still took two years to complete.
‘We are not trying to take over the world, nor to try and be the wisest guy in class,’ he says. ‘Back in early 2009, we had £120 million of AUM and had only been managing discretionary portfolios for a short period of time. We gradually increased this to our current £500 million.
‘The growth in AUM has not been a straight line and there have been many years when it stood still. We gained a large amount when we acquired the [Waterson Jones] business in 2014 and feedback from the clients has been positive. It helped that we inherited an enthusiastic staff member who, four years on, remains as positive now as she was then. Quite often the success of an acquisition relies entirely on such enthusiasm from your colleagues within the acquired business.’
The consolidated accounts for Dart Capital and Waterson Jones for the year to 30 April 2018, which Whitehead said he will shut down in the near future, reported a net profit of £769,000, up from £601,000 year-on-year, on a £3.5 million turnover for the year 30 April 2018. The sum is expected to near £1 million this year, with the numbers due to be published at the end of April.
‘People value people and they value relationships,’ Whitehead says. But money does not come without building strong bonds with clients and colleagues, he adds, a realisation he made several years into his career – which may have been too late for some of those he had earlier bumped up against, he admits.
‘I now acknowledge that back in my mid 20s I must have been very difficult to work with. My confidence arose from a great education, close family and a stable life. Fast forward the intervening life experiences, you become more philosophical about the realities of the path you tread,’ he says.
‘I was lucky in my late 20s and early 30s that I had a very supportive manager who, for whatever reason, believed in my potential and, despite a lot of backstabbing from some elements, pushed me above the parapet at a time when others were losing their jobs,' he says.
'At that stage I did not appreciate how important having a sense of humour is in business – no-one had ever taught me that, nor did anyone explain that accepting the occasional wrong path is part of life’s experiences. How you accept that none of us are yet perfect, with humility and a smile, is a wonderful skill.'