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Castle Court: Here Be Dragons

Jack Price, Partner, Castle Court Wealth Management LLP, talks to Neil Martin


 

If you’ve ever wondered where Welsh rugby stars go when they retire, then Cardiff-based Castle Court Wealth Management LLP would be a pretty good place to start looking. There are no fewer than five former Welsh international players and British Lions involved with the firm – either on the payroll or as clients.

And with figures such as Martyn Williams (MBE), Jamie Roberts, Lee Halfpenny, and Jonathan Davis around the place, you won’t be surprised that a love of sport runs right through the firm’s identity. To stay balanced they also extend across the bridge with the likes of Stephen Myler and Lewis Moody.

But then, Castle Court’s founders aren’t exactly uninvolved. One of the founder partners Andrew Booth played professional rugby with Cardiff and Wales and represented Wales at all levels, including being part of the Welsh squad at the 1991 World Cup.

But that wasn’t the reason I was there to talk to co-founder Jack Price, one third of the team who run the business (Richard Gough is the third member). No, we were discussing the firm’s decision to sign up in 2012 as a partner practice with St James’s Place Wealth Management. A decision that wasn’t taken lightly, but which Price feels has been more than worthwhile in terms of the way it’s freed up capacity for dealing with the firm’s clients.

A Long Campaign

Castle Court had ploughed its own furrow for about ten years, he says, until the three partners realised that having the support of a company with a major research and back office function would allow them to do what they do best – handle the affairs of their clients. But there was nothing hurried about the decision to sign on SJP’s line.

“I think we’d reached the peak of where we could go with the IFA world,” he told us. “A world fraught with difficulty. We were set up technically to be as strong as we could in the IFA world, but it still wasn’t really working. We arrived at the point where the world turned on its axis in 2008 and the very nature of advice changed – the fallout from that has been horrendous for the IFA community in general. It’s a tough world as an IFA now and so many good practices are struggling to maintain a solid business model”

“By far, the biggest fundamental is that you have to look at your capacity as an advisor. We used to run our asset and allocation models on a monthly basis. There were three guys with over 60 years’ experience between them, looking at the best offerings we had to meet clients requirements to achieve circa 3% above inflation on invested monies, and we were asking ourselves what was the best way to be doing that on the balance of modelling funds?”

The approach, when it came, was gradual. “When we met with St James’s Place in 2010 to begin the conversation with them, we were also looking at an offer of a purchase from a London financial firm and a Bristol/South West based accountancy firm. We had some sizable and viable options already on the table. But, as far as we were concerned, I couldn’t see how those other two would fundamentally improve us as a business offering.”

The logic of affiliating to St James’s Place, he says, was partly that the Castle Court team felt it could move from benefit from being a part of a bigger team. “In fact what they were offering was a comprehensive research, compliance and legal engine to trade under. What other IFA in this position can say that they are spending around ten million pounds a year researching the best possible talent to run our clients’ money?”

“We are still the planning firm we were. But nowadays, when I come in on a Monday morning and I have access to no end of credible research information, provided by a FTSE 100 company with 47 billion under management to support our planning models, it makes a difference.”

Stadium Appeal

The firm has three areas of focus, Price says – SMEs (mainly owner manager businesses), private clients and media, sports and entertainment types. And it’s remarkable, he says, how well the various elements mesh.

Take the firm’s very own Martyn Williams, for example. “We’re fortunate in that Martyn’s off-field activities are similar to his on-field activities: he’s generally accepted to be an intelligent individual with a much grounded perspective.”

“We thought he’d would naturally align to running the sports advisory proposition, but very quickly he realised that although the sport was enjoyable, he was getting a lot more enjoyment out of dealing with the business owners.”

And then there are the firm’s extensive roster of media and entertainment clients, including presenters, bands and opera singers. Price says that although there are a lot of similarities between sports stars, and the media, and entertainment, the latter area can be more fragile.

“The majority of contracts are short term” he says. “It might only be a record deal, or a media contract. Our view is that sensible cash-flow forecasts over the three years will illuminate real wealth shortfalls

“But music and media industry professionals are sheltered from the daily machinations of life, due to lifestyles they lead. With a lot of these industries – media, music, sport– significant daily costs of life are met by other people. And sometimes Price admits that they have to “place a heavy dose of reality on it” – and that it becomes the adviser’s job to spell out the realities of fame and not always fortune – and the need for financial planning.”

SME Requirements

Price is at pains to explain that the firm tries to develop long term relationships with its clients, especially the individuals running businesses. “We don’t have a huge number of clients, so a lot of the client relationships tend to go beyond being just the financial adviser or the wealth manager. It becomes a weekly conversation and a check on the actions that they’re taking. These individuals are time poor so will engage a trusted resource frequently over a wide scope of subjects.

What concerns Price and his partners is the number of business owners who don’t have an exit planned out. He continued: “It’s frightening how many you sit with and it all sounds very good, until you ask about an exit and they look at you with completely fazed eyes. That’s pretty much what our role is – to establish how much money they need and how realistic is the time scale for getting it.”

At the end of the day, if the firm ever does have a difficult meeting with a business client, there’s one last trick in its repertoire. “You can have a fairly honest conversation without them getting offended,” says Price. “And if they do get offended – sharing a beer with one of our sporting clients usually relaxes the issue! It’s a strategy that appears to be working!”

 

Check the video of Castle Court’s sign-up with SJP at http://tinyurl.com/lyxedmb

 

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