This article first appeared in the print edition of The Spectator magazine, dated 16 May 2015
‘Let me tell you about the very rich,’ said F. Scott Fitzgerald. ‘They are different from you and me.’ Indeed they are. They can afford to live in London.
Just how different became clear when The Spear’s 500 — ‘the essential guide to the top private client advisers’ — landed at the office.
(We assume Spear’s sent it by mistake. We write for love here at The Spectator, and would be insulted if the editor offered us anything so vulgar as money.)
Still I was glad to read it. Spear’s paints the best portrait I have seen of a world beyond our means and comprehension. Do you have a starstruck child you wish to impress? One Lady Cosima Somerset of Concierge London boasts how she arranged a ‘chance’ encounter between a famous actress and a client to ‘wow’ his 12-year-old daughter. Or maybe you want a party that would make Fitzgerald’s Gatsby gasp. Dora Lowenstein Associates describes how they threw a bash for a client which was so star-studded that ‘Prince Charles and Camilla Parker Bowles were little more than faces in the crowd’.
The editor, William Cash, son of Bill, does not quite say so, but the guide is aimed at helping the world’s super-rich find a home among us. It tells them that everything their money can buy is here waiting for them.
There are lists of private bankers, investment managers and tax lawyers, to manage their money; family lawyers, who can draw up pre-nups and fight staggeringly expensive divorce cases when the loves of their lives turn out to be gold-digging hussies; immigration lawyers, who can get them residence in Britain while sparing them the need to pay British taxes; libel lawyers who have rebranded themselves as ‘reputation managers’, who will sue those who fail to show them the required respect; and security specialists who can help them ward off fears of polonium-210 in the granola.
Spear’s has equine advisers, interior designers, yacht and classic car specialists, and wine and art connoisseurs. However much these sound like the help you yearn to be able to hire, much of their advice is miserablist. Fine wines, Spear’s tells us, are ‘especially tax-efficient investments as they are regarded as deteriorating assets by HMRC’. How joyless and dispiriting. What is the point of being rich if you look at a case of Château Pétrus and see only an investment?
I was as dispirited to discover that the only members of the Spear’s 500 I knew or was ever likely to know were lawyers who had tried to sue me for writing about their clients. I will never meet the rest. Nor in all likelihood will you.
It costs a lot to be rich in 2015. To announce you are merely a HNWI (high net worth individual) is to admit to shabby gentility. The men and women who advertise themselves and their services in Spear’s are interested in UHNWIs (ultra high net worth individuals) with assets of £20 million or more. Cash tells us the ‘cautionary tale’ of a friend whose family had banked with Coutts for generations. One morning a letter arrived saying that the minimum level for a Coutts account was now £1 million and she would be barred if she could not increase her balance.
The old world of old families treating their private banker as a friend and confidant is gone. Today it does not matter where your parents and grandparents banked. If you ain’t got the brass, you don’t get the class.
A few figures give you a small idea of the large sums you need to keep up. London has the greatest number of UNWHIs in the world. Luxury property here is the third most expensive in the world, according to Knight Frank. Only Monaco and Hong Kong, where a shortage of building land creates artificial house price inflation, surpass it.
A vast service industry serves the super-rich’s needs. London wealth management employs 23,000 people and contributes £3.2 billion to GDP. St James’s, Mayfair and Canary Wharf have overtaken Zurich and made London the wealth management capital of the world.
So great is the number of oligarchs wishing to come here that the Indian government tried to restrict the amount of money its rich could take out of the country. Camilla Dell, a property consultant, notes that ‘prospective Indian clients wanting to buy something in London’ put their deals on hold. But, she reassures us, wealthy Indians soon ‘found ways’ of getting round the restrictions.
At first glance, the men and women who greet them don’t look like servants. They parade their degrees from Oxford, Harvard Business School and Insead, and emphasise their virility. Charlie Hoffman of HSBC Private Bank tells us that he unwinds by skydiving. ‘It’s like synchronised swimming at 150mph — it actually brings the heart rate down.’ Spear’s describes Kirstin Boldarin, a wealth manager from Stonehage, as an ‘athletic South African’ who enjoys ‘a life balance of Italian cooking offset by long-distance running’ — a sure recipe for flatulence and cramp in my experience, but perhaps it impresses others.
The grandness of their qualification and vigour of their exercises cannot hide the fact that for all their gym-toned bodies and Oxbridge-trained minds they are servants of a largely foreign plutocracy. To his credit, the aptly named Cash does not try to hide it.
‘I have noticed,’ he says, ‘the number of former industrial, retail and manufacturing British families whose core business today is providing advice to a new generation of entrepreneurs.’ The Spear’s 500 includes a great-grandson of Winston Churchill, Randolph Churchill (a wealth manager at Rathbones), who rather than trying to lead his country has settled for understanding ‘all his clients’ needs and not just their wealth management requirements’.
Cash himself describes with honesty and pathos how his family lost their weaving business in the 1970s. He tried to buy it back and make his family a manufacturing family once again, but he could not make the deal work. Like so many others from the British elite, he has settled for tending to the needs of the far wealthier elites of Russia and Asia; to being a member of a servant class rather than a productive class.
When the Conservatives won their majority last week, I wondered why I was so upset. It is not that I hate them. I know the modern left can behave just as badly as the modern right — worse, on occasion, because its patina of righteousness allows it to get away with more. I realised that I felt sick to my stomach because I feared for my home city. The Spear’s 500 went to press before the count. As you flick through its pages, you catch a faint hint of fear in the booming self-confident voices of its wealth managers and equine advisers. What will happen if Labour wins and tax breaks for nom-doms go? Will the Russians and Indians keep coming if taxes on homes worth £2 million or more rise?
They had no need to fret. Buyers swamped central London estate agents with orders of £500 million on Friday morning. Agents predicted prices would soar by 10 per cent as the Tory victory let loose a ‘surge in pent-up activity’.
The working and middle classes will carry on fleeing the capital. Housing association homes will go the way of council homes as David Cameron dumps them at a discount. The circle from central London within which only the wealthiest can live will grow ever wider, and the once great, exciting, industrious and creative metropolis of London will become what the Spear’s 500 want it to become: Monaco without the sunshine.