Capital strength rarely enters the conversation whenever the merits of a wealth management firm are considered.

The focus tends to concentrate instead on client assets under management along with their rate of change almost to the exclusion of other factors such as profitability and revenue generation.

Going forward, however, especially against the backdrop of Covid-19, the capital strength of a wealth management firm, as measured by its balance sheet, and especially net equity, could start to become much more important in any consideration.

This is because the size and composition of the balance sheet, and es...