Never Mind Brexit - UBS Sees Gold In UK Regions
This publication has interviewed the head of UK domestic and head of regions at UBS Wealth Management to discuss the firm's expansion across the UK.
Continued domestic growth is why UBS Wealth Management is building out UK operations, rather than any play on the Brexit process, the head of the firm's domestic business has said.
The Zurich-listed bank and world's largest wealth manager isn't just hiring teams in far-flung regions such as Asia. As this publication reported in May, UBS Wealth Management has appointed Karan Sejpal as head of its new London high net worth team, Simon Pearson as head of North West, and Aidan Dunstan as head of North East and Yorkshire, a newly-created role.
Nick Tucker, who has been with UBS since 2010, explained why UBS is pushing outwards in the UK, shrugging off Brexit as a factor.
“What we are doing in our domestic business – both in London and regional – is a continuation of growing our UK national business over the course of the last 18 years,” said Tucker. “The strategy has not changed based on Brexit – our domestic is a core part of that. It has had a very similar footprint for many years. The only relevance of Brexit on our business is the potential impact it may or may not have on wealth creation.”
With Swiss banks (Switzerland is not in the EU) such as UBS and Julius Baer developing a regional UK presence, it appears they are tapping onshore UK wealth potential regardless of how the Brexit negotiations, and all the concerns about market access to the Continent, proceed. In January, this publication reported that Swiss private banking group Julius Baer said it was going to expand in the UK when it opened a new branch in Scotland. The bank isn't alone in developing a regional policy, of course. Existing UK-headquartered banks such as Barclays and Coutts, among others, have a regional footprint. And it is has been noticeable from recent reports how often Scotland comes up in news about offices and hires.
“We opened our first office in the regions in Edinburgh in 2002,” Jonathan Brown, head of regions, also told this publication. “And we have grown gradually since then. We are not necessarily accelerating the expansion. It is fair to say that the UK regional businesses are probably the strongest growth area out of our UK locations. Our business is growing very quickly. As and when an opportunity arises e.g. a lease on a property expires or is coming up for renewal – naturally we look at whether we stay or relocate. The addition of new advisors is dependent on finding good talent. This is not a mandate to get people through the door – it is an ongoing mandate to continue to hire, high quality individuals whether they are very experienced or are showing great promise.”
UBS Wealth Management has five offices based in the UK regions including operations in Birmingham, Newcastle, Manchester, Edinburgh and Leeds. They are overseen by Brown.
During UBS’ expansion in May, the firm created a new London-only team to deal with high net worth clients within the English capital. Tucker spoke about why the firm has created a London-only team, and how London-based clients differ to those in the regions.
“It is more to facilitate capacity to grow,” said Tucker. “There is an optimal size of teams already, we have three high net worth teams in London. Those teams were as big as they could get, so in order to be able to continue the pace of our growth – we needed to create a new desk. I think in London we have a mix of business executives, financial services executives and entrepreneurs. But in regions, the amount of entrepreneurs is significantly higher. The way one would service a financial executive as opposed to an entrepreneur is different. We have created training programmes for specific client advisors who covers specific areas to make sure they have that understanding – but in London we also cover entrepreneurs. It’s more at a CA level that we individualise that training. One of the things that differentiate the regions from London is how close our client advisors in the regions are to our clients.”
There is a range of growth with the UK – a variety seen within the recent 2018 Sunday Times Rich List – as those in top ten with British citizenship acquired their wealth differently, including:
- Jim Ratcliffe – 1st - chemicals;
- Sri and Gopi Hinduja – 2nd – finance and industry;
- David and Simon Reuben – 4th – property and internet;
- Galen Watson and George Weston – 9th – retailing; and
- The Duke of Westminster – 10th - property.
Brown, who has been with UBS since 2004, also spoke about whether the firm has specific plans to grow – after it said it was going to double its headcount in Edinburgh over the next two years, as reported by this publication in January.
“It is a competitive environment,” said Brown. “I don’t think there are any particular areas that have fewer competitors, and equally we are looking to recruit in all areas and expand in all areas. I don’t think there are any specific region where we are having a specific focus. We have recruited across the board and we are continuing to have a number of conversations across the country. The next recruit could be in the South West or Leeds or Newcastle or Edinburgh.”
Brown discussed how the firm felt about other large financial institutions entering the UK market.
“We have obviously seen that recently with Julius Baer entering the market again,” added Brown. “In a way it is good to see competition in the market – we are not without competition. Clearly other firms see the potential in the UK regions. Around 66 per cent of wealth in the UK is held outside of London – so there is an awful lot going on beyond London and the South East, and a lot of firms appreciate that. We are not complacent at all. We want to grow our position in the regions. It is a fragmented market across the country and we want to grow our market share. And we bid to do that by continuing our service for our clients, and growing our client advisor base through well-selected recruitment.”
In the UK, UBS has private client assets under management totalling more than £31.7 billion ($42.3 billion), as at Dec 2015, and over 200 client advisors.