There’s no denying the challenges ahead for the wealth manager industry, but increasingly it is looking like these guys will be laughing when compared to those at the lower end of the advisory spectrum after RDR.
Existing clients of wealth managers are not likely to be put off by the clarification of charges brought about by RDR, but those who use a single adviser for all their financial planning and investment needs are more likely to be.
According to a report issued by Scorpio Partnership today, the wealth management industry is responsible for influencing the wealth of nearly 10% of the UK population. This entails the management of nearly £2.1trn of private client money and puts the wealth management contribution to the UK economy at 1% of GDP.
In addition the Scorpio Partnership said the industry directly employs 124,000 individuals and generates £30bn in annual revenues. Not an industry to be trifled with then.
A force to be reckoned with?
It should be said, however, that Scorpio Partnership’s definition of the industry included high net worth private banks, mass affluent private banks, private client investment managers and wealth management IFAs. Service providers such as platforms, trustees, accountants and lawyers were also included.
Within that scope there are a variety of models and perhaps even deviations from what most people might consider a wealth manager to be.
Yet the sentiment is encouraging: wealth managers matter and have a lot of influence to boot.
Barclays’ chief executive, Bob Diamond’s, ringing endorsement of the wealth management business under his watch is also encouraging. He said the business had seen double-digit growth in revenue and pre-tax profit in the past two years and should continue to this year.
A slightly smaller beast in the sector Brewin Dolphin recently announced four new senior executives hired for its London office and a new office in Bristol, even if it did simultaneously cut five jobs in Aberdeen.
Finally relative newbie Signia Wealth has announced a raft of expansionary measures since the start of the year, including the opening of a Bristol office (is there something I don’t know about going on in Bristol?) and a number of new hires.
Clearly every business is different, and will be coping with its own individual pressures in the run up to RDR, but the wealth management sector as a whole certainly doesn’t seem to be rolling over and giving up.
What are the main concerns you have for 2012? Are you confident your business will survive, and perhaps even thrive, in the new regulatory era? Let us know below.
