In this ‘2 minutes with’ segment, we put Andrew Thatcher, Managing Partner of online cash management platform Flagstone Investment Management, under the spotlight.
Easy one to start with Andrew, can you tell us what exactly Flagstone is and why you decided to set up the business?
Sure, Flagstone have built a proprietary technology platform, Astra, which allows our clients to sign one simple agreement and instantly access hundreds of different cash deposit accounts across a wide range of banks in order to maximise their yield and manage their risk. Trading is electronic, there is no further administration required after set up and the client maintains their FSCS protection and benefits from the security provided by segregated trust accounts. We set up the business to be a solution to the problem of inertia that sees clients leaving their cash sitting at the same bank for long periods and earning a sub-optimal return because opening bank accounts, researching bank risk and moving money around is an inefficient business – that and the fact that given the market size is £2trn+ in the UK alone we thought it was about time someone addressed the opportunity.
What is the biggest concern facing the cash management and deposit industry today?
There are many. Record low yields, finding banks that want to actually take cash deposits, increasing and changing regulation that makes traditional offerings more difficult to provide, changes under Basel III that make deposits less attractive forms of funding for banks and those are just a few!
It is a market that needs clever well thought out and well executed solutions and that is what we are here to provide.
What does Flagstone bring to the market that’s unique?
When we started Flagstone we were aware of three of four companies who were trying to do something similar in spirit to the business we envisaged but with the handicap that their business models didn’t necessarily appeal to both clients and banks at the same time, or solve the administration issue of account opening. What I think makes Flagstone unique is that we have created a model which works well for clients, works well for our partner banks and makes what has traditionally been a cumbersome and time consuming task easy for all. In addition we have built a new technology platform that is fit for purpose with no legacy issues and created a proprietary risk rating methodology that makes it easy for our clients to assess and compare the relative risk of banks side by side and see deposits in two dimensions for the first time – every deposit available on the Astra platform has its own risk/return ratio so you can consistently compare apples with apples in a way something like a traditional best buy table is unable to give you.
How do you see Flagstone impacting on the market as a whole in the future?
Given that a cash deposit is effectively an unsecured loan to a bank we hope our impact will be to make clients think about managing their cash in a much more proactive and professional way. Astra is essentially a treasury platform that will allow our clients to manage their cash in the same way that up to now has only been employed by very large corporates.
Are you able to explain in a bit more detail how the Flagstone platform works?
Although cash is often regarded as the most simple of asset classes, the complexity of building a platform offering hundreds of deposit accounts across instant access, notice and term accounts in multiple currencies both on-shore and offshore was anything but simple to build. Despite that challenge we wanted Astra to be simple and intuitive to use, with a clean and well-designed interface that had features that actually made a difference for clients. The platform works by making the best information available to our clients in a way it is easy to see, understand and act upon. It gives a visual representation of where the best accounts are from a risk and return perspective as well as more traditional tables of information and provides an easy way to build a portfolio, or add to one, whilst seeing how your choices will impact on your overall yield and risk before you execute. Additionally the platform provides forward looking risk alerts, interest rate alerts, consolidated statements and tax reporting so you can truly have everything in one place. One of the new features we have recently released is that we can now fully white label the platform for wealth managers and provide them with the flexibility to manage cash for all of their clients in one place or provide the platform directly to their clients with a view only access.
Tell us a little about your life outside of work, do you have any hobbies?
Outside of being a weekend taxi driver for 3 kids, I am a keen cook and a season ticket holder for Liverpool FC. If I can’t get to the game I’m often to be found in the kitchen of a Saturday afternoon, listening to radio 5 and having a beer whilst cooking dinner for whomever we might have over that evening.
What is the one column or website that you read every day?
I actually try to make a habit of reading as many of the daily newspapers as I can every day. Although the stories are often repeated you get a different slant on each one that I think is a valuable way of understanding different people’s point of view.
What is your biggest pet peeve, or makes you angry?
We’ll go over the word count if we start that list.
What would you do if you were Prime Minister for a day?
Make coding part of the National Curriculum
What would you do if you received a windfall of £1000?
Depending on whom I was with, either spend it on a good lunch or probably have a bet on something I fancied.