Stonehage Fleming sees Covid-19 as a catalyst for change

While the financial world frets at the economic impact of the coronavirus, resulting from dramatic declines in commercial activity, Matthew Fleming is highly conscious of how the crisis will affect the mental health of vast swathes of the global population confined to social isolation.

“We had 70 per cent of our staff working remotely within a week,” says the still youthful looking 55-year-old partner at multi-family office Stonehage Fleming. “But we are particularly concerned about the social and psychological impact on younger members of our team,” says the former professional cricketer, who captained Kent in the 1990s, described by one commentator as “an occasionally inspirational” player.

“My mother has been telling me about the post-war experience, about how they had nothing, but were keen on being social. Today, some of us have everything, but no longer the ability to be social in the traditional sense.”

Human contact

Speaking by mobile phone from the driveway of his Norfolk home – while his wife and three daughters work from desks inside the house – Mr Fleming wonders out loud whether the post-virus “new normal” will recognise basic human needs for face-to-face conversation, despite the proliferation of digital platforms.

“Physical contact and traditional communication will still remain the most important channels,” asserts Mr Fleming, responsible for the firm’s family governance and succession operations. 

Currently, the real priority for families, regardless of wealth, is maintaining support networks, which is why he has asked his teams of advisers to talk to clients as often as possible. “While there has been a marked uptick in the use of digital platforms, most families are just trying to figure stuff out for themselves, working out how does their life look in this unparalleled set of circumstances.”

Wartime comparisons come naturally to the former British army officer. He talks about how immediately after the second world war, citizens of many countries had internalised a league table of patriotic priorities, headed by country, followed by business, family and themselves as individuals at the bottom of the list.

“Self-sacrifice has been less instinctive for us in subsequent generations,” confesses Mr Fleming, whose personal fortune was estimated at $30m by the Sunday Times in 2012. As great-nephew of James Bond creator Ian Fleming, he was for many years responsible for the 007 film franchise.

But recently, he has seen a slow but sure trend of wealthy families making both philanthropical donations and investments that benefit society as a whole, with the likelihood of the current crisis accelerating these changes.

He cites the example of one of his Norfolk neighbours in the hospitality business. “My friend runs a lovely hotel nearby, which he has handed over to the NHS to use as a hospital. We are recognising that there are people out there, whose first instinct is about what they can do for their country or the wider community.”

New world?

While much of the wealth industry recognises the changing values of the ‘Next Generation’ compared to that of their parents, Mr Fleming believes we have now reached a crossroads. “A much wider question faces us: what will the values of society look lie post-coronavirus?” 

A recent pre-crisis survey of clients by Stonehage Fleming recognised boosting financial capital as just one pillar of successful portfolio management, with many families feeling under threat from a lack of intellectual leadership guiding them into future generations.

“How we, as a society, embrace social, cultural and intellectual capital after this unexpected situation” will shape the perception of wealth in the territories where it is sourced and serviced, he believes.

“I would be surprised if the current crisis doesn’t act as a catalyst for change. But it will take time for the enormity of what’s happened to sink in, for the people and for the economy to start healing.” 

Once this healing process is under way, he expects environmental, social and governance factors to take centre stage in the plans of wealthy families, with the “new normal becoming a better or different place”.

Step up and be counted

The one thing he is most certain of is that a cohort of strong and capable leaders, both in the family business and political worlds, will emerge from the adversity ahead. “Often, you only observe the true qualities of leaders in times of change and crisis,” volunteers Mr Fleming. “It will be interesting to see if the current political and institutional leadership can rise to manage this challenge.” 

He also expects more leaders from the ‘Next Generation’, such as UK Chancellor of the Exchequer, Rishi Sunak, to enter the spheres of business, government, institutions and family stewardship.

Among leaders who have inspired Mr Fleming, the first he mentions is recently deceased Field Marshall Lord Bramall, former chief of the British Army’s defence staff, who was involved in the D-Day landings of 1944.

“He taught me that the most important people in the army are not the generals, but the riflemen in the trenches,” with rank or length of service seldom guaranteeing top quality decision making.

As well as the life lesson from the Field Marshall, of building an institution from the bottom-up, he learned from Adam Hollioake, captain of England’s one-day international cricket team – in which Mr Fleming featured during the late 1990s – that leaders must always keep their teams motivated.

“Adam had a great talent in making you feel you were the only person who could do the job, even if it was not true,” laughs Mr Fleming. “He always gave you the impression he believed in you.”

As part of his responsibility for recruitment and staff mentoring, Mr Fleming is keen to embrace diversity among relationship managers, convinced that it improves group performance.

During his father’s spell of running the investment firm in the 1980s and 1990s, the hunting ground for new recruits was restricted to applicants with first class degrees from just six British universities.

The younger Mr Fleming has since broadened the net to include a more eclectic mix of sportsmen, private bankers, soldiers, accountants and lawyers, with stronger emphasis on professional qualifications. He also believes family offices who recruit solely from private banks are missing a trick.

“If we only focused on former private bankers, we would become one dimensional, whereas most families are multi-dimensional and need to cope with a whole range of expected and unexpected consequences,” says Mr Fleming. “We must base our recruitment on character and values.”

Size matters

Scale and brand recognition has also played into the hands of  Stonehage Fleming, now the world’s second largest multi-family office and Europe’s leading player, with $46bn under management for more than 250 ultra-wealthy, global families. 

Mr Fleming admits the 2014 merger between his Fleming Family & Partners firm, overseen by relatives of banking entrepreneur Robert Fleming and James Bond writer Ian Fleming, and South African family office Stonehage, totally reshaped the wealth management landscape.

“There is more and more evidence to suggest that to support multi-jurisdictional families, you need a degree of scale to cope with regulatory requirements,” he says. “And to recruit the best talent, this scale is now vital.”

He is also pleased with the continued collaboration with other leading family players, such as Stonehage, that have led to a string of milestone deals. These included the hugely influential Jardine Fleming asset management link-up with the Keswick family in Hong Kong, sold to JP Morgan Chase in 2000; the ongoing film partnership with the Broccoli family to develop the James Bond catalogue; and a recent £90m ($104m) injection into Stonehage Fleming from investment trust Caledonia, controlled by the Cayzer Family.

Yet despite these positive results, he typically advises family clients not to rush into similar transactions, however attractive they may look. “There are more examples of co-investments that have not worked, despite the families appearing very much culturally aligned at the beginning of the relationship,” warns Mr Fleming, who encourages “sharing of ideas and notes” among his clients rather than formal partnerships. “A lot of families like talking about investing together, but not so many end up doing it.”

He cites an example close to home, with the Flemings receiving many invitations to co-invest with other families in the film business, but deciding to stick only with the tried-and-tested James Bond brand.

“It has been tempting for us to invest further in the film business. But thankfully it is a temptation we have overcome. As a family, we have dabbled round the edges of film, but we have been lucky enough to be in partnership with the Broccoli family,” says Mr Fleming, looking forward to the release of ‘No Time to Die’ in November 2020, delayed from April due to the Covid-19 pandemic. “They have expertise making films and we write the stories. We have achieved more working together than attempting the whole thing on our own.” 

It is Mr Fleming’s firm belief that the leadership shown by representatives of many of these major families will help the world recover from its current dark times.