Independently-owned investment management, tax and accountancy group, Smith & Williamson, was established by its eponymous pair of tax accountants in Glasgow some 130 years ago. While the firm moved south to London shortly after, it enjoys a substantial presence in Glasgow even today.
Smith & Williamson Partner, Frank Akers-Douglas (pictured), explains: “We have concentrated on private clients and tax and wealth management throughout the history of the firm. Many members of the original family, which led to the establishment of the investment department a century ago, are still clients of the firm six generations later.”
Akers-Douglas feels that it is that continuity in providing a holistic financial service in such a specific sector of the market that has allowed the firm to grow substantially. “Our services to family office clients have been the genesis of the Smith & Williamson business. We have concentrated on presenting this suite of services to clients of that nature to support them in their medium and long term financial strategy,” he says.
Partner Charles Gowlland says: “One of the things which remains key is that we provide a service rather than a product. And if we do launch new things, it’s because the demand is there, not the other way around.”
Gowlland also believes that the historic shape of the firm, which is majority owned by present and past Partners, Directors and staff adds to its strength. “Our partnership structure differentiates us from other firms and makes us masters of our own destiny. That ability enables us to focus on how best to serve our clients over the long term.”
In his experience, many family offices suffer from being sold products. “Instead, clients want trustworthy people who will be around to serve them and their descendants,” Gowlland says. “Because we have the continuity of Partners and staff we also have continuity of clients.”
In terms of trends, Akers-Douglas has identified a significant change which has occurred over 2014 and into 2015 in terms of tax advice. “There have been changes to giving tax advice,” he says. “Formerly my role was to ensure my clients avoided the bear-traps of an increasingly complex tax system and paid the correct amount of tax, but matters are now more complicated. The clear distinction between tax evasion and avoidance has been blurred and as a result, people are understandably increasingly cautious in their approach.”
Akers-Douglas finds this a major shift which has affected clients’ attitudes and the way they look to manage their affairs.
For Gowlland, a big change has been the huge overhaul in regulation which has affected the sector and which continues to have its impact. “Brussels is planning further legislation,” he says. “So again the compliance costs for a lot of businesses are ratcheting ever higher.”
In investment terms, many Smith & Williamson clients are looking for yield. “The chase for yield will continue” Gowlland says. “We still think there are opportunities in some areas, for example structured credit, otherwise the main option is equities. Investing in these assets classes will bring additional risks to capital values, so clear communication is more important than ever, so as to calibrate the client’s risk/return appropriately. We aim to have long term relationships so there is no point in promising something that can’t be delivered.”
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing. The tax treatment depends on the individual circumstances of each client and may be subject to change in future.
Investment does involve risk. The value of investments and the income from them can go down as well as up. The investor may not receive back in total the original amount invested. Past performance is not a guide to future performance. Rates of tax are those prevailing at the time and are subject to change without notice. Clients should always seek appropriate advice from their financial adviser before committing funds for investment. When investments are made in overseas securities, movements in exchange rates may have an effect on the value of that investment. The effect may be favourable or unfavourable.
Smith & Williamson LLP
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. The word partner is used to refer to a member of Smith & Williamson LLP or Smith & Williamson Investment Management LLP.