Leading a responsible investment revolution, Rob Gardner St. James's Place
Updated: Jan 30, 2022
Rob Gardner joins Purposely Podcast to share his fascinating story, from a childhood in inflation ravaged Argentina to disrupting the pension industry through his successful start-up ‘Redington’.
Rob is currently Director of Investment at St. James’s Place Wealth Management, a highly respected visionary, Rob is leading a responsible investment revolution in wealth management.
Rob is responsible for planning, growing and protecting the wealth of c850,000 clients in the UK and Asia. St. James’s Place manages c£150 billon of client funds, Rob’s main goal is to ensure that these clients have enough money to live a long and prosperous life, at the same time using this money to be a force for good as delivering financial wellbeing in a ‘world worth living in.’
Rob started his career in investment banking at Deutsche Bank working in foreign exchange. Rob then moved to Merrill Lynch where he helped pioneer a way for pension funds to manage their long-term interest rates and inflation risks. In 2006 he resigned to become an entrepreneur and co-founded Redington, “we wanted to do for pensions what Jamie Oliver did for school food”. Redington today is one of the largest investment consultants in the UK, employing over 200 employees in London, Bristol and Beijing. While Rob no longer works at Redington but remains a shareholder in that business. During his time at Redington, Rob also co-founded a charity RedSTART focused on delivering financial education to children across the UK especially those who need it most. Rob talks about his personal commitment to RedSTART’s mission and how they plan to play a key role ‘ in planting the seed for the financial security for young people across the UK.
I normally ask my guests about organisational mission but it struck me that you have your own personal mission?
‘Yes that’s right, over the last few years I have used a concept called Ikigai (Japanese philosophy) to decide my personal mission, it mapped what I love doing, what I think I'm good at, what will enable me to make an impact paired with what the world needs. Ideally something I can get paid for and suits my skills - the epicentre of that is financial well being in a world worth living in. So if you look at my career and the things I do, they basically fall under either helping to create financial wellbeing or helping towards ensuring a world worth living in.’
You spent some of your childhood in Argentina?
Yes, my parents were teachers and moved there to take up roles at the end of 1985 when I was seven years old. One of the interesting things about Argentina in that period is that inflation was running at over 30% a month. So imagine being paid and then at the end of the month your spending power is 30% less than it was the month prior. Incredibly prices would change every day and Mum and Dad would get paid a wad of cash and we would then go and do the monthly shop. In the evening, we drove to this house, I don't know if you've ever watched a show called Narcos, this was a scary house big metal bars on the windows and Dobermans in the garden and my dad and one of the other members of staff would go up to change their money into US dollars. Then that night we’d head home with our US dollars and hide them typically in the old 35 millimetre film canisters and hide them around the house. So remember, I'm seven years old, my sister's five, and this is normal and I why are we doing that?! Well, there are two reasons, one was inflation and the second thing is that people didn't trust putting their money in banks.’
You had the beginnings of a successful career in investment finance but you decided to leave to set-up your own company?
‘Yes, I left in 2006 and I remember a very senior person at the firm sitting me down to explain why my decision was wrong, he said, ‘what you don't understand is that people talk to you because you work for this global brand and when you leave here and set up your own business, you're nobody and no one will want to talk to you. You've got such a bright career here, what are you doing, you should stay. That wasn't the most motivational or convincing stay speech I've ever had. I decided to leave and set up Redington’s, but I think it did teach me an important lesson, which is that we would have to work incredibly hard to establish a brand, one that was trusted and has credibility with people.’
You started Redington with your co founder Dawid Konotey-Ahulu, did you have complementary skills and experience?
‘Dawid and I are very purpose driven and we're both very outgoing people, however, in other areas we're very different and I think that was a strength. There's this constant debate about whether having co leaders of businesses works or not and typically the consensus is that you should only have one boss but I think we really complemented each other. Dawid and I are about 15 years apart in age, we're best friends, he was best man at my wedding. I mean, don't get me wrong we've had some ups and downs and when you start a business, in fact, we started two businesses together it's like a marriage and you work at the relationship and there’s been highs and lows’
Dawid Konotey-Ahulu, co-founder Redington
Redington’s appears to be a purpose led company delivering commercial value but was also about making a difference to people's lives?
‘Six years in, we were still very much a start-up and we were applying for RFPs (contracts) and part of those requests or presentations was based on our CSR strategy policy and I didn't want to just say we will volunteer, we will plant trees, paint fences. Luckily I was introduced to someone who specializes in advising individuals and companies about giving back and he said to me, Look Rob, the best companies don't only give away money or time they also give away their intellectual property. A good example of this is IKEA who ring fence their design and manufacturing capability to help people.’
There was no financial education in the UK and financial education was only put on the secondary school syllabus in 2014. We wanted to do something about this and we started inviting kids in from local schools to our offices, we started teaching them about money and how to save money and the importance of budgeting. We were focused on secondary school kids and then in 2013, there was some research done by Cambridge University for the Money Advice Service, which basically showed that our money saving habits are formed by the age of seven which is why we then pivoted and now RedSTART (the charity we started to carry this work forward) is focused on financial education to primary school children, from reception, which is four to five right all the way through up to years 11 plus.’
In 2018 you decided to do something big in your life, which is to step away from Redington as an employee, was that a particularly difficult decision?
‘I suppose like everything in life, there were both push and pull factors and I think this goes back to purpose and what motivates me and ensuring financial well being in a world worth living in. I actually wrote a blog in 2012, setting out a 100 year vision for Redington. People thought it was a bit crazy, but I think now is a bit more accepted but of course by definition it cannot include the founders. In 2017, we tried to go out and do a small private equity fundraise and we were trying to expand the business and we needed some capital to grow and this was a brutal process. We got some candid feedback and some wonderful stuff about our business. i.e. we love your purpose, we love your culture, you have amazing clients but then here are all the things that are bad about your business and one of the key questions was can Redington be successful without the two founders? It's a great question and if you're an investor the key person risk is a real one. We both realised that addressing this would be a good thing for the long term success of the business. It was always about creating a culture and an organization and we didn't name the business after ourselves, right! That was a bit of aha moment and for Redington to be successful in the long term we needed to just step back and we needed to create that succession plan and leadership capability in the business to take it on its next journey. So that's kind of the sort of push factor. ‘
‘The pull factor was that I was really focused on working with large pension funds and defined benefit pension funds in advising the trustees. I did a little bit of work on defined contribution but my passion was always to be closer to people and their financial decision making. There's no one bigger in the UK to provide this opportunity, St. James’s Place has c850,000 clients and c£150 billion pounds worth of their wealth under investment. At the time, it was probably like 750,000 clients when I joined and it was probably about £96 billion pounds. I actually got approached by David Lamb who was the previous person in the role and he shared with me that he was retiring, and they were running a process to find their successor. It was a sliding doors moment, these two conversations happened at the same time’
You have led St. James’s Place’s recent and renewed focus on responsible investment?
‘I'd worked with the HSBC pension fund and Legal and General Investment Management and co designed and created the future World Fund. I also got Redington to sign up to the United Nations PRI and I was advising some of the largest pension funds in the UK to integrate environmental, social and governance factors. So, in my institutional world it was very clear the responsible investing was the only way to invest going forward and it was the best way to create long term investment performance, not necessarily short term quarterly performance, but to create performance over sustained periods over the decades to come. The interesting thing about the retail market is it's almost running five to ten years behind the institutional world. So for me responsible investing was pretty much known and I thought there was a real opportunity to be able to take it to St. James’s Place and make it the leading wealth manager in this space. The structure of the business means that we can have real influence and so there was an ability to do it really authentically and at scale.’
It hasn’t been without its challenges though?
‘That's fair to say and the reality is I wasn't bought in to only drive that (responsible business), I was brought in to help us grow our capacity and continue to deliver superior performance so we can continue to grow. I have been in the role three years, I have focused on delivering financial well being for our clients and that means we need to grow the funds we manage faster than inflation. This is not a charitable thing to do, it is something that has a very clear economic rationale as a way to make profit and a way to make money for our clients investments - our primary purpose. It just so happens, that how we invest our money can have a profound impact on businesses and at a very simplistic level companies impact on the planet. If there's a flood or if there are fires or droughts that impacts the supply chain and you might not have food to grow or your supply chain may get damaged. Businesses have a positive or negative impact on the planet. I mean, the most obvious being the way we create energy or how do we make electricity, is it from oil and gas? or is it from renewable sources? Businesses over the long term need to make money and profit and economic growth is good but they also need to do it in a way that doesn't destroy the planet or have a negative impact on the people or communities that it employs or it works with or in.’
Where do you go for personal inspiration?
‘I read a lot and I listen to a lot of podcasts. I'm part of a group formed on the idea that leadership is a lonely place and you're put together with fellow entrepreneurs monthly and we follow a very specific process. It's almost like group therapy to help you think about stuff and the whole mindset is always about learning and how can you develop yourself as a leader. I've been part of that for eight years now. I also have a mentor called Mike Harris founder of First Direct, which was the first telephone bank in the UK. It is still known today as the number one bank for customer service in the UK if not in the world and then in 1998 he founded Egg which was the first internet bank and his whole thing is a purpose beyond money. It was Mike who mentored me around Redington’s purpose and what can we do to transform people's financial future. It was the work that I did with Mike that really helped me tap into Redstart (the charity) and this idea of financial education. Mike has become a good friend of mine. In addition one of my old clients used to be chair of employee and corporate pension schemes as well as a respected CEO of a FTSE 100 business and Chair of various PLC boards. So when I was joining St. James's Place, I wanted someone who had sort of FTSE 100 PLC experience. I have had a wonderful collection of mentors to help me.’
What do you do to relax?
‘I love to play tennis when I can although with two young kids and home schooling, relaxing became non existent in 2020, and first part of 2021. But as we come out of lockdown we like going to the theatre and we like going on holiday.’
What is your vision for St. James’s Place over the five to 10 years?
'I'm really excited about the future, St. James’s Place is going to be sharing its refreshed and renewed brand focused on the idea of helping our clients embrace their tomorrow. I think SJP has made some brilliant moves over the last few years. It just shared its net zero commitments and launching TCFD reporting around climate change on top of the fact that we make a material difference to our c850,000 clients lives and the business has grown. We're approaching a FTSE 50 business status and I think the bigger more successful you get the more important it is to authentically be aligned with your purpose. Continuing to do what we do as a business which is give brilliant advice to clients about how they make decisions about their money and that's never been more important. I'm really excited about the work that my colleagues Vicky and Amelia are doing around financial education. I think that's a game changer. I think the work that my team are doing around financial well being in a world worth living in and if we keep growing the way we do we will reach £200 - £250 billion pounds in Funds Under Management by 2025. I think we have a real responsibility not just to deliver great investment performance to our clients, but to make sure that that money is invested in a way that is a force for good.’