Rob Gardner got his first taste of working from home when he co-founded pensions consultancy Redington from his spare bedroom in 2006.
The new director of investments at St James’s Place, the FTSE 100 wealth manager, laughs when he recalls how he and business partner Dawid Konotey-Ahulu set up makeshift IT and finance departments in kitchens and attics as their fledgling operation grew.
Back then, the pair were focused on helping final salary schemes to tackle their large deficits and “doing for pensions what Jamie Oliver did for school food”.
Despite being camped out in his spare room once again, Mr Gardner is no longer a plucky upstart. But the 41-year-old has brought his scrappy, entrepreneurial spirit with him since joining blue-blooded SJP last year.
Dressed in an open shirt, Mr Gardner appears a world away from the Savile Row suit-wearing wealth manager stereotype. He speaks enthusiastically during our conversation over Zoom, gesticulates liberally, and is unflustered when his toddler leaps on to his lap.
Having previously served as CEO of Redington, his new position at SJP appears to be a step down. However, he is regarded as a potential candidate to one day lead SJP, possibly succeeding Andrew Croft when he vacates the CEO role. Mr Gardner sits on the group’s executive leadership committee but is not a director on its board as a public company.
His arrival at SJP coincided with a time of upheaval for the £109bn-in-assets group, which attracted public scrutiny last year over high fees and staff sales incentives, including luxury cruises.
The company is also reeling from negative associations with Neil Woodford, the fallen UK stockpicker who managed a mandate for SJP before being axed by the group after his flagship fund was suspended a year ago.
St James’s Place
Assets under management £108.8bn
Employees 2,100 plus 4,500 advisers and 6,000 adviser support staff
Headquarters Cirencester, UK
Ownership Publicly listed
Mr Gardner is now leading a modernisation drive that will involve sharpening SJP’s focus on environmental, social and governance factors, and making sure the wealth manager’s costs and charges are communicated clearly.
While SJP has been monitoring fund managers’ ESG credentials since 2014, Mr Gardner says the group has now given “real bite” to its efforts by pledging to pull money from any manager that refuses to sign up to the UN’s Principles for Responsible Investment by the end of the year.
Mr Gardner says Mr Woodford would not have made the cut under the group’s new ESG framework. “He was one of the worst-rated managers on our internal ESG rating system,” he says.
SJP drew criticism for repeatedly defending Mr Woodford even as his performance deteriorated. But Mr Gardner maintains that it was poor governance rather than just bad investment bets that was Mr Woodford’s undoing.
Another plank of Mr Gardner’s modernisation drive will be expanding SJP’s low-cost investment options. The group is planning to launch a range of low-carbon “passive plus” funds, strategies that function like tracker funds but apply a human overlay to select a sub-set of stocks from an index.
The shift comes as SJP faces new competitive threats with US low-cost fund provider Vanguard preparing to enter the UK advice market and after the launch of a joint wealth management business from Lloyds and Schroders.
However, Mr Gardner insists that SJP does not intend to get drawn into a race to the bottom on charges. The passive fund push is about “looking to the future and making sure we have the right components to combine for younger clients”.
SJP’s 5 per cent entry fee combined with its annual fund charges of up to 2.5 per cent mean that its headline fees are among the highest in the industry.
Yet Mr Gardner defends SJP’s charging model, pointing out that its entry fees are amortised over time as a way of incentivising clients to invest over the long term. He adds that SJP’s fees need to be seen in the context of the overall value they provide, given that they include investment management and financial advice. However, he acknowledges that SJP wants to do more to break down its fees and explain them to investors.
Mr Gardner says that the looming savings crisis in the UK was the pull that lured him to make the move from institutional investment advisory to retail wealth management. “The big wake-up call for me is the fact that we’re going to live to 100, and we know that most people don’t save or invest enough.”
Yet the growing cost of providing financial advice combined with a fall in the number of qualified advisers is pushing some investors in the direction of low-cost automated advice services, such as Nutmeg and MoneyFarm, which Mr Gardner says lack the ability to provide holistic advice on how individuals can retire with enough money.
“Knowing what to do and having someone make you do it can have a transformational effect on people’s future,” he says.
He recalls how he only took financial advice for the first time six years ago; while setting up Redington he poured all of his savings into the business and neglected his financial future. “The sad truth is although I was a pension expert advising some of the largest pension funds in the UK, I hadn’t set aside the time to prioritise my personal financial wellbeing. In 2014 I met with an SJP adviser and I think the value of that advice alone was worth over £1m.”
Born 1978, Leidschendam, Netherlands
Total pay Not disclosed
1997-2000 Geography, University of Oxford
2000-03 Deutsche Bank, global markets
2003-06 Merrill Lynch, director
2006-18 Redington, co-founder and CEO
2019-present St James’s Place, director of investments
Mr Gardner now has significant personal wealth to invest, having sold shares in Redington, which is now the UK’s fourth-largest pension consultant with £50bn in assets under consulting, to private equity firm Phoenix Equity Partners last year. He says the consultancy, in which he still holds some shares, is in good hands under the leadership of CEO Mitesh Sheth. “Mentally it was time to hand on the leadership to the next cohort.”
The decisions individuals take about their retirement have been made even more challenging by the coronavirus-induced drop-off in dividend payments that many retirees rely on for income.
But Mr Gardner worries more broadly about the dearth of available investment solutions for the so-called decumulation phase, when investors convert their pension pot into income. The executive, who with Mr Konotey-Ahulu carried out the first-ever liability-driven investment transaction for the Friends Provident pension fund, says innovative thinking is needed.
“When you’re managing decumulation, designing outcomes is a completely different skillset than for the accumulation phase,” he says. “This is a massive issue we have to solve.”
Creating a savings culture is a personal mission for Mr Gardner. In 2012, he co-founded RedSTART, a charity to improve financial education for teenagers, and four years later he wrote a children’s book, Save your Acorns, about a group of animals that set aside food ahead of a drought. His daughters, aged 5 and 3, have been SJP clients since they were born.
Born in the Netherlands to international-school teachers, Mr Gardner has lived in several countries, including Argentina during the country’s period of rampant hyperinflation. At the age of seven he obtained a “real, visceral understanding” of how inflation worked from watching his father exchange pesos into dollars to preserve their value and running around the supermarket so as to pay for groceries before prices changed.
The idea that his daughters will live into the next century frames his thinking on responsible investment. “What we need to do is use capital markets to be a force for good and deliver financial wellbeing in a world worth living in,” he says. “That means one where we haven’t trashed the planet, where the ice caps haven’t melted, where Spain hasn’t become desert and the coral reefs are still in tact.”