In a world where the cult of the “modern” is almost tiresomely pervasive, it is notable how many private client professional services firms have been in business for many decades, patiently accumulating goodwill and deep bonds with generations of clients. We look at the case of Saffery Champness.

Continuing a series of organisation insights into key firms in the world's wealth management industry, WealthBriefing looks at the work of Saffery Champness, the accountancy firm specialising in sectors such as private client advisory and tax.

In a world where the cult of the “modern” is almost tiresomely pervasive, it is notable how many private client professional services firms have been in business for many decades, patiently accumulating goodwill and deep bonds with generations of clients.

Case in point: Saffery Champness, the UK chartered accountancy firm with a strong line of expertise in tax, business and other advisory work. It may not rank among the very largest professional services firms but it is a significant player with a total of 58 partners and four senior directors in Guernsey, out of a total workforce of 450 people. The firm has, besides its network of nine offices in the UK, an office in Guernsey and Geneva. It was recently ranked as the 15th largest firm by the profession’s monthly journal, Accountancy.

And this is no spring chicken of a business, either. Joseph John Saffery founded a practice in 1855 at the height of the mid-Victorian economic boom, based out of Guildhall Chambers in the City of London.

Some of the business lines at the firm look deeply traditional – at least on the surface – while other elements – such as parts of its tax advisory side – are more clearly geared to recent developments. But appearances can be deceptive as WealthBriefing found out in a recent interview with Jonathan Fox, managing partner, Tim Gregory (partner in the private wealth team), and Matthew Burton, who heads the landed estates group . This is a business that thrives on the challenges of the modern financial world; its partners also frequently comment on issues affecting the industry.

Structure

Operating under a partnership ownership structure, Saffery Champness is led by Jonathan Fox, managing partner. He oversees the whole operation and his experience and background – he is not a trained accountant – is very much in business development. He has previously been chief executive of both a firm of solicitors and managing a chamber of barristers. He is the only non-accountant managing partner of a top-20 firm.

Within Burton’s landed estates practice group, the firm acts for owners of over three million acres of land. As for Gregory, his private wealth group has clients such as business people and entrepreneurs, sports stars, entertainers and those that have inherited wealth and range from those with modest wealth to multi-billionaires.

Private Wealth & Estates Group is led by: James Sykes;  

Business Advisory Group - Nick Kelsey

Media and Entertainment - Lorenzo Mosca

Not-for-Profit - John Shuffrey

Professional & Consultancy Services - Richard Collis

Property - Max Floydd

Landed Estates - Matthew Burton

Client types

Saffery Champness clients tend to be in the owner-managed business sector, whatever the focus of their business, with long-established successful family firms at one end of the scale, and, at the other, fast-growing entrepreneurial companies on the verge of a public listing and needing the help of Saffery Champness Corporate Finance, the firm’s FSA-regulated business wing.

Another characteristic of the clients is their international scope. While most will have a base in the UK, they frequently require the ability to have their business or personal financial affairs handled outside the country. To achieve that, the firm is also a member of a business network called Nexia International, through which it can obtain expertise to help clients with personal and business affairs in over 100 countries around the world. Saffery Champness has reciprocal arrangements with firms in cities such as New York, for example – staff from each firm can work at the other.

“This business is constantly evolving. For instance, over the last 5 to 10 years, we have been doing a great deal more international work. That is growing at such a rate that it will become more of a focus for us as well.” “We are UK focused but internationally minded,” Gregory said.

As part of that evolution, Fox said that as part of the 2011/14 three-year review process of the business, that the firm was planning to create an international practice group to reflect the international dimension of so many client requirements. The firm also has an active “Russian Desk” to meet the needs of Russian clients, and the launch of a Chinese Desk is being considered.

Gregory said that rising burdens caused by tax compliance issues was a big driver of work for the firm. “It puts us in an even stronger position – clients want to have a firm with our reputation and technical ability.”

The private wealth side of the business has, along with its peers, been faced with a seeming torrent of legislative and regulatory activity. For example, as judging by a Business Update publication from the firm last autumn, clients have faced events such as the 2008 Pensions Act in the UK, the 2010 Bribery Act, a new top rate of UK income tax of 50 per cent and the recently introduced annual levy on resident non-domiciled people. And from abroad, for example, has been a flood of compliance-related activity from the US Congress through such legislation as the HIRE Act and associated FATCA provisions, signed into law last year.

As regulatory and tax burdens have become more intense, so has client demand for even greater value for money from accountants involved in the process, said Burton.

“There has always been, and even more so now, a demand to deliver compliance at a cost-effective level. There are lots of price pressures in that area.”

The wide Saffery Champness network in the UK, for example, meant that clients in different parts of the country could be served by the office that suited them best – there was no requirement to be served by one particular place, regardless of cost.

“On the advisory side, it will always be a high yield practice and we have to ensure that we stay competitive,” he said.

Land just got interesting

Burton said that although the business practice group known as landed estates may sound rather traditional, the practice has been very busy with the focus in recent years on renewable energy developments, and all the issues revolving around the financing of such projects.

“That is a development in the last couple of years and that has really come to the fore,” he said.

Numerous estates throughout the UK are considering how it might be possible to harness energy from their own environment. One example of this combination of the modern and traditional is the Haddon Estate in the Peak District, owned by the Manners family since 1567. The estate is home to a hydroelectric power scheme, the first such initiative to be developed within a National Park.

The firm says it is at the forefront of helping rural businesses develop in a sustainable and profitable manner. There are, for example, wealth and tax structuring issues that can come up when a person or group of owners wants to set up wind-farms, Burton said.

Private wealth

As for the private wealth side of the business, Gregory argues that the area of business concerning resident non-domiciled people in the UK remains very busy. Although the annual levy on non-doms was introduced more than two years ago, this remains a deeply complex area and generates a lot of work.

As for the trusts sector, it remains lively although UK government regulations have made it less appealing than a few years ago, the firm said.

“There has been a drop-off in the attractiveness and therefore amount of new work in trusts, but trusts still do have clear advantages. There is more focus on opportunities for existing trusts in the UK, because of the increasing tax burden on them,” said Gregory.

“Trusts still offer a solution to wealth succession from generation to generation that helps to protect both the wealth and the next generation itself.  Navigating a clear course for succession planning that prevents unnecessary tax charges arising has become an even more important skill than it was before.  And of course, there are still all the trusts that existed before the new rules, and these too need careful and specialist advice,” he said.

Even if the amount of trust activity declines, it would be foolish to let the level of expertise in this area drop, Gregory continued.

With the ageing of the Baby Boom generation and the rising tax burdens in some areas, there is also continued interest, he said, in pension structures as a wealth planning tool.

Succession and passing on assets tax-effectively is also increasingly top of mind for clients. There is a tension here between parents living longer and so requiring income, but wanting to help their children out when they need assets.