This week I asked PAM Insight’s editorial team what they thought the biggest industry-specific stories of year were. Answers varied, but among those that surfaced were: Coutts’ dealings with Nigel Farage; UBS’ takeover of Credit Suisse; and the Rathbones and Investec W&I merger.
These answers probably will not surprise many. They are undoubtably some of the largest stories impacting the UK wealth management sector. However, with around 2,500 articles published on thewealthnet in 2023, a lot more newsworthy events have happened.
So, here’s a whistle stop tour of most of the forgotten major developments in the UK wealth management sector from 2023 in (roughly) 500 words or less…
If I were to ask what do Coutts, Stonehage Fleming, Evelyn Partners, Weatherbys Private Bank, Investec Wealth & Investments UK and EFG UK have in common, I would imagine I might be met with some confusion.
Aside from all being constituents of the UK wealth management and private banking industry, they all had a major change in 2023 – their chief executive, or UK head, left their role. These individuals all left under different circumstances, but this is still a significant amount of change for a relatively small industry.
More change in this regard is expected in 2024, not least because Coutts and Stonehage Fleming currently have interim replacements in post.
These chief executive changes just touch on the surface of the industry’s movers, with thewealthnet only covering over 600 job changes over the course of the year. Recruitment and staff retention remain headaches for firms as they aim to hold onto top talent within what remains a competitive market, despite the economic environment.
Special mention must go to the former Berenberg UK wealth management team, who resurfaced at a range of firms, including Rothschild & Co, LGT Wealth Management and Mirabaud, after their previous employee closed shop unexpectedly in October 2022.
One thing that often prompts a series of moves is mergers and acquisitions. Investec W&I’s combination with Rathbones demonstrates this, with a number of figures leaving the former firm, many of whom ended up at Close Brothers Asset Management.
This is not always the case. There have not been substantial moves seen following LGT Wealth Management’s takeover of abrdn’s DFM business. The £140 million deal has perhaps been overshadowed by other M&A activity – including the aforementioned Investec W&I and Rathbones combination and UBS’ takeover of Credit Suisse.
It would not be a year in the wealth management sector without some regulatory changes. This year saw Consumer Duty come into force, which is already having an impact. St James’s Place, and other firms, have already made changes to their fees following the Duty becoming effective.
Meanwhile, greenwashing has been a key topic of conversation, both for firms and the regulator. More rules have been proposed to put a stop to greenwashing practices, while investor sentiment for ESG appears to have cooled. Firms should not wait for regulators to force them into good practices, getting on the front foot will surely stand them in good stead.
Wealth management firms’ corporate results presented a mixed bag. Most experienced at least modest falls in assets under management, while some suffered more than others in the tough investing environment. The latest figures from ARC suggest the next set of results may paint a more positive picture, something wealth managers will say has not come too soon.
And finally, while the industry was very keen to talk about AI, very little has happened in this regard so far. Most are remaining cautious for now and have instead focused on updating legacy technology systems and developing their digital solutions.
Brooks Macdonald has been through this process, completing its digital transformation late in 2022. That said, the firm has not had an easy 2023, with a number of senior exits occurring at the start of the year and the announcement in October that it is reducing its headcount by around 10 percent. The firm still has ambitions of being a “top five” UK wealth manager and remains optimistic it is on track to achieve this aim.
It would be amiss not to mention GAM and Liontrust Asset Management - otherwise known as the acquisition that was never meant to be. This story certainly accounts for the "strange" in the headline, as a billionaire succcessfully managed to lead a proportion of his fellow investors in GAM to derail the acquistion. With a struggling company to turnaround, this group are going to need some luck - or a more appealing bidder - in 2024.
Looking back on all of this news, it’s no wonder I’m feeling tired…
