Affluent investors abandon traditional wealth managers

As the big banks write off billions, the dissatisfied ‘new rich’ are switching to the rising stars among the smaller independent banks, says Lorna Bourke

And it is worth following the example of the seriously rich. They seldom give all their assets to one firm to manage – they spread it around. This has the advantage of keeping the wealth managers on their toes. Knowing that service and investment performance is being measured against competitors is a great spur.

Those with £500,000 to £10 million of free assets to invest will almost certainly get a better service with lower fees from an independent asset management firm such as Smith & Williamson or Rathbones. At the top end of the industry are firms with highly qualified individuals with a variety of skills and have Chartered Financial Planning status, the industry gold standard.

One of the major complaints from private banks’ clients is that they are not given enough information about their investments. For those who want to take an active interest in their investments, one of the private client stockbrokers may be the best solution.

Firms such as Rensburg Sheppard, which manages over £8 billion in private client discretionary portfolios, and Hargreaves Lansdown, are private client stockbrokers as well as financial planners and will manage either a discretionary portfolio of shares or mutual funds, or offer an advisory service where clients make the investment decisions based on advice from the firm. Hargreaves Lansdown has chartered status and has a wide range of expertise in pensions, family businesses, trusts and all aspects of wealth management.

And big is not always best. For a very personal service, firms such as Alan Steel Asset Management, which has some £800 million under management, might be the answer. Alan Steel has been in the business for years and is renowned for getting his clients out of tech stocks in 2000 before the dotcom bubble burst. The firm has eight planning executives with a wide range of expertise, as well as four tax and trust specialists and around 4,000 clients.