Officially scheduled to open at the beginning of January 2014, Square Mile Investment Research and Consulting will provide much that is similar to the company the two are most closely associated with, OBSR, offering investment services that include research, consultancy and model portfolios.
A familiar feel
Square Mile is a UK-focussed business, the nuts and bolts of which is providing qualitative fund research with plans for a fund ratings business early next year. However, the duo also acknowledge there is an opportunity for this type of service overseas, and said they "will go where there is demand"
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it would therefore not be surprising to see, in time, the new company operating in places like Asia and the Middle East.
It is far from a ‘me too’ proposition as Romer-Lee, managing director of Square Mile, is quick to point out.
“What differentiates us is we are independent, we are investor-focused, and the service we offer is built into our business model,” he explains. “This is so important because if you don’t put the interests of the investor first in your business model then there is a danger that you won’t stick to that. History is littered with people who have said one thing and done another.”
While they are still in the early stages of building the business, the two founders – Whittingham is head of distribution – are being joined as a director by David Pickles who will also take on responsibility as head of operations.
He has been a consultant with, and employed by, a number of leading life assurance companies and asset managers, counting M&G and Henderson as former employers. For the past eight years he has been a director of his own consultancy, Deep Square, and has worked on various projects over the years alongside Romer-Lee and Whittingham.
The latter explains that Square Mile will work with three distinct customer groups – wholesalers (life companies and platforms), advisers and fund managers – across the whole investment process starting with the assessment of client needs, to strategic or tactical asset allocation, fund selection and portfolio construction.
He says: “We will effectively be able to provide all of those services together, or we can unbundle them so if you want anything from a managed portfolio down to fund research and guided architecture you can take just those elements you want.”
Relevant today
Working with different client groups means Square Mile is not reliant on just one of them.
The majority of the company’s revenue will come from those intermediaries who buy into Square Mile’s consultancy services. An alternative revenue stream will come from fund management groups paying to hold a marketing licence for a fund rated by Romer-Lee and the “significant” team he hopes to build.
Whittingham confirms that, as with the OBSR model, they will do the fund research irrespective of whether the fund group pays. They will also allow IFAs access to the research on rated-fund information online, free of charge.
However, reiterating the fact that they are not simply recreating the OBSR they sold to Morningstar, they are more than aware that the world has moved on in the past three years.
Romer-Lee says: “There has been a change in regulation, in openness, in business models and I think there is increased accountability. All of this is good but we think whoever you are if you can have someone who can help you understand what is there and whether or not it is any good has to be a good thing.”
To sum up Square Mile, he says: “Our job is to help people with their businesses, to help them with their clients, their service, to help them look good, help them solve any challenges they have, and help them help their clients make better quality investment decisions.”
Visit our website on Friday for more analysis and extracts from the first interview with the founders of Square Mile Investment Research and Consulting.
