A Piece of Mind: What is keeping the UK’s top Wealth Managers and Private Banks up at night?

23 June 2016James Goad

Piece of MindWealth Management and Private Banking


What is keeping the UK’s top Wealth Managers and Private Banks up at night? 

Last week we had the privilege of bringing together the top CEOs and CIOs from the leading UK private wealth firms to thrash out the key challenges facing both their businesses and the industry - with a view to finding ways to collectively drive change forward. 

“Today wealth management, tomorrow the world” -  sorry I digress… the mad scientist in me seeking world domination is breaking out again.  

We live in fascinating times, as distributors both in the discretionary and advisory space continue to struggle with rising regulatory burdens; cost income ratios; digital disruption; and consumer mistrust.  And all this in the geopolitical shadow of Brexit, Trump and the rise of populist extremism.  Rather apt we celebrated International Panic Day this week! 

This is reflected in the gloomy bullish rating of 7/10 the Wealth Managers scored this year which is far lower than all other distribution channels.  Interestingly Northern Advisers are the most optimistic distribution channel – perhaps there is something in the water up there?  Also, when we asked them to look into a crystal ball and predict how the value chain would change in the next 2-3 years, they foresaw consolidation across the whole value chain apart from fund construction and advice. 

I don’t want to depress you, so the good news is that apart from back office headcount you are anticipating an increase in AUM; revenues; client numbers and front office headcount.  However, costs will also continuing to rise (but at a slower rate).  Carpe diem! 

Each year we put together a SWOT analysis (very Old School) to help us identify the changing trends and here is a sneak preview: 


Last year the focus was all around your proposition, but this time around there is a much greater focus on business models of the future and the impact of technology. 

However, by far the biggest challenge and threat facing Wealth Managers continues to the rising cost and burden of regulation.  We have heard this time and time again over the years, but rather worryingly we are now seeing evidence that the level of regulation is hindering businesses’ opportunity to innovate and even strategise, as they are drowning in day-to-day fire fighting. 

However, it isn’t all bad news.  Our ‘regulation readiness barometer’ shows that you feeling more ready than you were last year across most regulations – particularly Conduct Risk & Suitability; CASS; FATCA; and MLD 4.  However the five big hot spots to be aware of are;

  1.      EU Savings Directive    
  2.      CSDR;  
  3.      Securities Financing Transactions Regulation
  4.      The Transparency Directive
  5.      Shareholders Rights Directive 

Ok, so it is easy to complain about the burden of regulation, but what would you do if you were in Robert Taylor’s shoes?  The three at the top of your wish list were simpler regulation; better communication; and a deeper understanding of the impact and burden of regulation on your businesses and the client.  Simple! 

But let’s not get bogged down with regulation, because the big riser over the past 12 months was technology - both as a challenge and a threat.  I think we now all accept that we have to embrace digital whether it is to improve your customer experience; differentiate your proposition; drive productivity… the list goes on.  However, how do you keep abreast of what’s out there and collaborate/fend off the digital disrupters? 

Before I get dragged into the outsourcing debate, I wanted to share a fabulous piece of software I stumbled across called Crystal Knows… don’t worry I’m not trying to pedal any drugs.  Crystal Knows takes Linkedin to a whole new level, and claims to know you better than you and your family & friends know yourself.  It basically walks the line between innovative and super creepy.  It mines your social profile around the internet and then produces a personality fit and profile of whoever you may be stalking, and tips on how to engage with them.  

I had a lot of fun seeking out both clients and colleagues and it gave me lots of fabulous information about specific relationship advice; how I should communicate and write an email to them; and how to win their trust.  I was chuffed to see that I am 84% compatible with my good friend President Obama, but rather concerningly both David Cameron and my wife only scored 27%! 

“So what” I hear you say.  Well this is potentially a piece of technology that could reshape the way you do business.  McKinsey have built technology that uses this system to recognise a client when they call your office, scan their personality; and then automatically put them through to a RM with the best personality fit in the company.  

Now I could go on and on, but do let us know if you would like to take a look at the full Scene Setter findings to get a full download of the stats.  If you are wondering what a typical Wealth Manager looks like at A Meeting of Minds, here are some simple facts: 

  • Over £210bn of AUM in the room.
  • They are predominantly restricted; discretionary; use external products; and are active investors.
  • Their pet hate is indiscriminate marketing from the providers.
  • Three quarters of them charge on an ongoing basis as a percentage of investment at an average of 95.5 basis points.
  • A third source new clients from existing clients and 22% via intermediaries
  • And the main reason they believe clients think they are awesome is because of the calibre of their people; their client relationships; and the independence of their business. 


By way of a slight pitch, if you would like to join some 70 “C” suite participants representing the UK’s top wealth managers, DFMs, private banks and MFOs for the next Meeting of Minds on Thursday 17 November at The Berkeley Hotel, London do please call us on 01483 861334.


Tuesday 21st June 2016 – By James Goad