We are looking at a number of international banks' and local UK firms' approaches to the UK regions, where there is a good deal of wealth and entrepreneurial vigour. Government policy, Brexit, and other shifts underscore changes afoot.
For UBS, having a broad footprint in the UK regions is a long-haul strategy that resonates with clients and has delivered results over the past two decades, senior figures have said.
This news service has decided to delve into the thinking behind why wealth managers large and small handle the UK regions, tapping into how the world beyond the traditional hunting grounds of London/Southeast holds plenty of promise. A fact that is sometimes drowned out with inevitable media and related focus on the capital.
Having a regional strategy is important and not just a nice-to-have. “It’s critical and we have had a presence in the regions since 2002, first opening the Edinburgh office. It is important to be close to our clients, potential clients and intermediaries, and to be active in the local community,” Jonathan Brown, head of regions, told this publication in a call. UBS, the world’s largest wealth manager, has offices in Birmingham, Manchester, Leeds, Newcastle and Edinburgh.
The UK regional business of UBS accounts for about a third of the firm’s HNW business in the UK. UBS doesn’t provide exact figures, but it is thought to be around £5 billion, which is approximately double the size it was when the current structure was established six years ago, he said. To put those results into some sort of context, first-quarter 2021 financial results showed that the global wealth management arm of UBS chalked up a pre-tax profit of $1.409 billion, up from $1.218 billion a year ago. GWM operating income stood at $4.848 billion, against $4.547 billion a year earlier. Total invested assets were $3.1 trillion in global wealth management at the end of March. There were net new assets of $36.2 billion, with inflows coming from all regions. (In recent years the Zurich-listed bank has booked results in dollars, because most of its revenues are from outside Switzerland.)
As recounted earlier in this article, some industry figures who have spoken to this publication are sceptical about how important regional offices are, particularly in a world upended by remote working and digital tech amidst the COVID-19 crisis. But Brown is unimpressed by such arguments.
That some commentators have been sceptical about the value of being in the regions is a bit of a “blind spot,” he said. Some 85 per cent of the UK population lives outside the greater London area and 65 per cent of the wealth in the country is outside that area.
His colleague, Martyn Begbour, regional head for the North West, Midlands, South West, and Wales, told this news service that there are so many opportunities outside London that a regional focus makes sense.
“I think wealth management generally has been London-centric and does not realise how entrepreneurial the regions are. People are looking for a class-leading wealth management service but from someone who really knows the area and the local service providers. There is an emotional connection,” Begbour said.
The UK is home to tens of thousands of residential non-doms (78,300 in the 2017-18 financial year), and not all of them live in London, but across the rest of the UK. A bank such as UBS with its international reach and resources has an advantage, UBS said.
“For resident non-domiciled investors who reside in the regions, and although we don’t give tax or legal advice, UBS’s global reach and expertise is a big plus and we have the ability to book clients in London, Jersey, Singapore, Zurich, among others,” Debjani Raffan, regional head for Scotland, Northern Ireland, North East and Yorkshire, said in the same interview.