Wealth management firms in the UK using Brown Brothers Harriman as their provider of back-office functions such as administration face changes after BBH recently signed a preferred arrangement with SEI, another US firm, this publication can reveal.

Under the terms of the arrangement, BBH custody and execution services will be offered with SEI’s global wealth services processing service to existing wealth manager and private bank clients.

The deal had not been previously publicized and WealthBriefing was alerted to the change after the chief executive of a large wealth management firm in the UK told this publication that BBH would cease to be its back-office service provider, with the existing contract terminating in 2011 and forcing the firm to make alternative arrangements. The CEO spoke to this publication on condition of anonymity.

However, in its statement emailed to this publication, BBH said: “This move will not have any impact on BBH’s other services in the UK or globally. We continue to be committed to providing top quality custody, fund execution, brokerage, and securities lending services to this client base from Brown Brothers Harriman London.”

“Brown Brothers Harriman (BBH) has been providing administration services to UK and Channel Island private banks, wealth managers and multi-family offices through our PAS product for several years. We have reviewed potential strategies and believe that a solution through SEI, will provide our existing clients with an enhanced capability going forward. SEI is a recognized leader in providing middle-office and fund accounting services to this market,” it said.
 
It is understood that the deal was driven by a strategic decision by BBH and has not been caused by issues such as the rising costs to firms of complying with regulations and tax. There have been concerns, recently aired by WealthBriefing, that US and other legislation, such as the recently signed HIRE Act, is encouraging some firms to pull out of some financial service sectors.