A UK example of such a mentor business comes in the form of Sturgeon Ventures, which has its origins as a family office created in 1998 to run the money for an American family. When the principal family member died in 2004, leaving a 3-year-old beneficiary, the latter’s affairs were placed into trust. Sturgeon Ventures keeps the trustees abreast of interesting investment themes, last year focusing on timber.

But Sturgeon’s managing partner, Seonaid Mackenzie, is not content to tread water waiting for family office work to resume. Instead, Sturgeon, based in London’s City district and authorised by the Financial Services Authority, now guides and supports financial entrepreneurs in sectors such as wealth management. Sturgeon made news recently when it announced that Tom Powell, who has a track record of launching hedge funds and founding the investment business Mountcashel, had been appointed chief operating officer at Sturgeon.

Mackenzie said helping firms start out from the drawing board and into rude health has proven immensely satisfying. And who knows, one of Sturgeon's breakaway firms could turn out to be one of the titans of the future.

“Once they ,” Mackenzie told WealthBriefing in a recent interview.

“We are doing much more than compliance, however,” she continued. For example, her firm will advise firms’ staff about the examinations they need to take to get registration, as well as advice on issues such as bringing out funds to market.

As an incubator, Sturgeon acts provided a “wholesale network for financial advisory firms” using a similar model to an IFA network with much more hands on approach, providing compliance services, and mentoring for nascent businesses, she said.

Firms that are mentored and developed with Sturgeon’s help retain their own identity and profit-and-loss accounts. They benefit from having compliance services and assistance from an FSA-registered firm and walking a path that has been walked before.

“If I had had a mentor like Sturgeon when I began, I would have chosen more appropriate lawyers, accountants, IT providers for my business,” she said.

New kids on the block

As previously recounted by this publication, there have been plenty of new wealth management players taking to the field in recent months, despite, or even because of, the economic turmoil. In some cases, companies are formed by teams from big banks eager to go it alone and frustrated by the bureaucracy and territorial conflicts that can occur inside a large organisation. Clients, unhappy at big losses at some of the big-name firms, may also be eager to try a new company taking a different approach. (To view the article, click here).

There are several examples of firms which have successfully left the Sturgeon fold, such as Illiquidx, a financial services business that specialises in illiquid markets, as its name suggests; another is Venn Partners, which provides balance sheet solutions for a variety of clients. Sturgeon carries testimonials of firms that have been helped along the way such as MPL Investment Management, Grisons Peak (a corporate advisory business); Haibun Partners and Progressive Capital Partners. Sturgeon’s client list also includes oil and gas advisory firm Wimmer Financial, US-based M&A consultancies such as Moelis and Harris Williams and venture capital platform Venture Capital Partners (sources: Sturgeon website, Financial Services Authority).

It is not just UK firms which have been helped. The mentoring/incubation service has also been widely used by European and US firms, either starts ups or established firms, that wish to begin regulated investment business in the UK in a timely manner.

Mackenzie has done work advising on investment funds, such as Old Park Capital, a business run by former Bear Stearns managers. It already has in excess of $200 million of assets under management having launched in March 2010. Old Park Capital LLP has rolled out a tactical asset allocation fund targeting European assets “Virtuoso”.

As Mackenzie likes to relate, the name of her firm is taken from a fish that starts life as a tiny egg, can grow into a 15-ft beast weighing a ton and living for 100 years. It is another take on the old image of small acorns growing into mighty oak trees.

Mackenzie reckons it takes at least six months for a firm to run from the start through to breaking away from under Sturgeon’s “wing”; the process usually takes between 12 to 18 months.

In her view, most of the other advisory businesses that might help firms learn about complying with regulatory rules do not also help with business development mentoring, a mix that she says makes Sturgeon almost unique. She stresses, for example, the fact that Sturgeon itself is an FSA regulated business and has had to make its own way, so its advice carries the weight of experience.

In a recent statement, Sturgeon said that the “vast majority of inquiries it receives are from bank or ex-bank workers. Start-ups are mainly asset management firms, corporate finance consultancies and third party fund raising operations. More foreign firms are also looking to locate new offices in London, trading on their own stronger currencies,” it said.

Mackenzie said demand for Sturgeon’s mentoring services is being indirectly driven by the FSA’s Retail Distribution Review, because the RDR is encouraging some would-be advisors to think about moving into the space of offering advice to high net worth clients.

There are five broad aspects to the business: incubation work, including a virtual chief operating officer; the family office; fund management, corporate finance and strategic advice.

Among Mackenzie’s ambitions is creating an ethical advisory investment business in the future in particular for family offices and wealth managers.

Sturgeon also has a foundation, The Wellness Fund Foundation, to start an awareness campaign for the financial services sector. (To view the foundation's website, click here).

Mackenzie certainly has plenty of work on her hands. If her track record is anything to go by, the financial industry should expect plenty more fledgling businesses to take flight in the next few years.