Most of the big wealth managers are pouring resources into the UK regions at present, but their efforts to tap the ultra high net worth outside of London are doomed to failure until firms stop merely paying lip-service to serving clients locally, former UBS senior private banker Max Thowless-Reeves told WealthBriefing in a recent interview.
Thowless-Reeves is the mastermind behind Sorbus Partners, a new Birmingham-based multi-family office, and he believes that the reason his new venture will succeed with UHNW clients where others have failed is simple: you have to be where your clients are, and have real roots there.
The fact that there is huge wealth outside London has not escaped the big wealth management firms and rarely a week goes by without news of another global name opening a new office or hiring in the UK regions. However, as Thowless-Reeves points out, regional expansion has not been plain sailing for the biggest wealth managers and some have been forced to pull out of the UK regions after just a couple of years of business.
Here, Thowless-Reeves makes the distinction that he is not talking about the smaller stockbrokers and investment management firms which have always been more regional in flavour, but rather the big UHNW wealth managers (the top four of which he believes are UBS, Credit Suisse, Goldman Sachs and JP Morgan). Followers of the industry will know that there have been several examples of high-profile firms withdrawing from the UK regions. Readers of WealthBriefing will remember, for example, that at the start of this year Credit Suisse decided to shutter its Birmingham office and instead to serve its Midlands clients out of London and Manchester. Thowless-Reeves also points to the case of Merrill Lynch, which began a regional rollout in the early noughties before subsequently shuttering regional offices.
In his view, while the big firms are right to have acknowledged that there is demand for their services outside of London, they have gone about addressing that demand in the wrong way – by using regional offices as “shop windows” for services which are in actuality located in the capital. The model deployed by the regional stockbrokers and investment managers - a centralised research function and local implementation - works “just fine” for them, Thowless-Reeves notes, explaining that for firms with an average portfolio size of say £250,000 (about $400,000) a “degree of centralisation is beneficial and necessary”. But firms thinking that this approach can be scaled up for regional UHNW clients are “making a mistake”, in his view.