The proposed marriage of two mid-sized wealth managers, Rathbone Brothers and Smith & Williamson, has not made City pulses race. But it will create a business with £56 billion under management, following a trend of sector consolidation in search of economies of scale that kicked off with the merger of Standard Life and Aberdeen Asset Management. And though the new couple’s names won’t mean much unless you already happen to be their clients, they have interesting histories.
Rathbones began as a timber-trading venture in Liverpool in 1742 and is the family firm of a dynasty of Quaker social reformers, including the formidable proto-feminist Eleanor Rathbone (1872–1946). Smith & Williamson, an accountancy practice as well as an investment business, was founded in Glasgow in 1881 — and if it lacks a distinctive flavour, it at least provides an illustration of luck on a grand scale. For many years almost half its fee income came from a single client, the Hall family. Thomas Hall was a small-town bank manager in Queensland in 1882 when he was visited by three brothers called Morgan offering a half-share in an unproven mining claim for £2,000. Hall raised the money and the Mount Morgan mine yielded 225,000 kilos of gold, plus vast quantities of silver and copper — creating a windfall fortune that the original Mr Williamson, who had Australian connections, was appointed to look after.
Both firms have a good reputation for looking after private clients. Let’s hope they don’t lose it in the cost-crushing drive that follows a financial merger and often expunges the culture that went before. The man in charge, Rathbones boss Philip Howell, ought to know the importance of history in business — having spent much of his career in Barclays, which his own Buxton and Gurney ancestors helped to found.