Reports

EXCLUSIVE: So Far, So Good For Coutts' Investment Offering For Expat Americans In UK

Tom Burroughes, Group Editor, London, 28 July 2017

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The private bank launched an investment offering a year ago that was targeted at expat US citizens, and says performance since has been strong.

Coutts may be known in some quarters as the Queen’s Bank – on account of the UK monarch being its most renowned client - but the private bank is also upbeat about growth prospects among clientele from “Jefferson’s Republic” as well as it marks the first anniversary of a service offering.

Last year the Coutts US Investment Management Service was launched. It provides two portfolios – balanced and growth – delivering the bank’s house view with an international outlook and using sterling as the reference currency and booked in the UK.

The bank said performance of the growth portfolio has been “strong”, achieving returns of 15.8 per cent (net of fees) in its first year. The balanced portfolio has also experienced strong returns in its first six months, this publication can exclusively report today. 

“A key factor behind the strong performance is European equities, which continue to do well, while the Coutts positions in healthcare and technology are also paying off. The preference for corporate bonds over government bonds, which are sensitive to rising interest rates and inflation, also remains,” the bank said in a statement. 

The offering to expat Americans puts Coutts among a handful of firms such as London & Capital, Maseco, Schroders and Royal Bank of Canada that have made a point of serving such clients while other non-
US banks have turned them away as an onerous compliance burden. The enactment in 2010 of the US FATCA legislation, tightening reporting requirements on firms with possible US clients, led to some lenders such as HSBC and Deutsche Bank turning US persons away.

“A key factor behind the strong performance is European equities, which continue to do well, while the Coutts positions in healthcare and technology are also paying off. The preference for corporate bonds over government bonds, which are sensitive to rising interest rates and inflation, also remains,” the bank said in a statement. 

John Saunders, managing director at Coutts international client group for US and Europe, told WealthBriefing that the service is part of an offering to US expats that dates back many years. 

“It’s been a demographic we have looked after for a long time. The team here is one of the most experienced we have in this business,” he said. There are an estimated 8,000 HNW US expats in the UK, he said.

“We can do banking to a very high standard; we can do credit and we can do investment services: the three pillars of clients’ financial needs,” Saunders continued0.

The team is currently “very well staffed”, he said, adding: “We have more potential in this space.”

He spokes about how Coutts can, via its various service channels, also help expats by connecting with legal and accounting advice, advice about finding schools for children, property, and other matters. Its concierge offering helps newly-arrived Americans to get the most of living in the UK - an example of how concierge can be a significant benefit for clients and for banks.

“There is a real brand draw for Americans with Coutts,” he said.

 

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