Wealth Managers Focus on UK Regions

Emma Rees

2 April 2007

In recent months UK regional expansion has become something of a strategic trend in wealth management. Kleinwort Benson has confirmed further expansion of its UK regional office network during 2007 and last week brought further news of openings in Leeds, Cambridge and possibly Belfast. Coutts has revealed it is expanding with new offices in Cheltenham, Reading and Chelmsford and Singer & Friedlander private banking is opening an office in Birmingham. So what is behind this focus on UK regional wealth? A recent report by Barclays Wealth into the UK wealth landscape forecast that within a decade, the UK would have the highest concentration of high net worth households (£500,000 plus including property) of any G7 country and that the number of “super millionaires” (£1.5 million plus including property) would exceed one million in the UK for the first time. The report also found that the ways in which wealth had been acquired has changed. Seventy-one per cent of those surveyed said that their wealth was acquired by savings from earnings and 13 per cent from the sale of a business, whereas inherited wealth was found to be the most important source of wealth by just 30 per cent of respondents. Perry Littleboy, marketing director of Coutts which has 17 offices in the UK, confirmed the trend: “What is interesting is that our first office, which opened in 1961, was in traditionally wealthy Eton. More recently, new offices have opened in perhaps less immediately obvious wealthy areas such as Liverpool, Milton Keynes, Reading and Chelmsford. This reflects the fact that today’s wealth is more widely dispersed, which is almost entirely due to the entrepreneurial spirit of the UK population,” he told WealthBriefing. But the desire to service this rise in regional wealth is not without its challenges. Mark Kibblewhite, managing director, Barclays Wealth explains how it is thinking laterally to staff its regional network of around 20 offices. “Currently, the talent pool of private bankers we need in the regions isn’t deep enough. We are working to harness the resources of those people moving from London to other regions across the UK, as well as training bright people from other professions. In so doing, we are creating a brand new profile of employment regionally.” Mr Kibblewhite believes that it is important to be sensitive to the differences in regional wealth: “The migration of people back to the regions on retirement means that pension and inheritance tax issues are more commonplace. In areas such as Wales and Scotland, for example, the business community is very tight and wealthy individuals wish to invest locally and take a particular interest in local philanthropic interests. “It is vital to have people on the ground who understand what is driving wealth in the regions. For example, there is a buoyant local entrepreneurial Asian community in Scotland, which you might not be aware of otherwise.” Richard Algar, head of the UK regional team at Credit Suisse also recognises the trend. Although the bank retains its Swiss heritage, it continues to grow its presence in the UK with a particular focus on the regions: “The creation of wealth in the UK regions continues to grow at a phenomenal rate. In order to meet the demand for private banking services, we have seven regional advisor teams in the UK covering the South East, South West, East Anglia, Thames Valley, The Midlands, North West and Yorkshire. Our regional advisor team is 100 per cent mobile and to make things easy for the client, we go to them rather than them coming to us,” he told WealthBriefing. Rina Sen Bijur and Prashant Ajitsaria were recently recruited to work for Citi Private Bank to expand its footprint throughout the UK. Ms Bijur, who works closely with clients in the Midlands and North West, says that many of her clients are in their 30s and 40s and running their second or third business. “Many of our clients are in real estate as well as retail, particularly in the luxury goods sector. We can provide them with a pool of intellectual capital in meeting their financial needs. For example, we have worked with our FX advisory teams in London to provide retail entrepreneurs that are exposed to fluctuations in foreign currency, with a means of hedging their exposure. And it works both ways. Recently a client based in the North West spotted a growing trend in ‘plutonomy’ – the growing market amongst the middle class in luxury goods – and developed a derivative product with our Capital markets team which is proving to be popular with clients in London.” Ms Bejur also recognises a growing trend for using private banks: “Whereas previously a local entrepreneur might have used the local firm up the street, clients now demand more sophisticated and complex financial advice and are well versed in comparing and contrasting the services they require.” The trend is predicted to continue as wealthy clients want local availability of private bankers with knowledge of local concerns. Mr Kibblewhite said: “With excellent universities, communications links and good regional airports, people are increasingly choosing to live and work where they were brought up or where they went to university rather than automatically moving to London. Wealth managers need to expand with this in mind.”