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Categorized | Banks, Financial

UK’s private banks shrug off Brexit fears

Posted on September 21, 2016

Chairman of the Swiss Bankers Association and Senior Partner of private bank Lombard Odier LODH Patrick Odier attends a finance conference in Bern, Switzerland June 28, 2016. REUTERS/Ruben Sprich©Reuters

Patrick Odier, managing partner, Lombard Odier

Private banks have shrugged off Brexit concerns with both Lombard Odier and Kleinwort Benson boosting staff numbers in London in a sign of growing confidence that the UK capital will retain its status as a centre for the global super-rich.

Lombard Odier will take on another five private bankers in London over the course of this year, with a further five planned for 2017, bringing the overall total to 14 in the UK.

    Plans are also under way to strengthen both the investment and wealth planning teams — and to launch a dedicated independent asset manager service for other fund managers and multifamily offices.

    Brexit had not derailed the 220-year-old banking group’s expansion plans, said Duncan MacIntyre, chief executive of private client business.

    “We were not diverted by it for a second,” he said. “We are fully committed to growing our UK business, as we think London will remain a core financial centre for both European and non-European wealth.”

    Other private banks echoed Lombard’s confidence in the UK’s wealth management sector. Kleinwort Benson has increased its specialist private merchant banking team in London, following an increase in demand from the super-rich for more private equity exposure to the UK.

    “There has been a real interest from high-net-worth investors across Europe keen to invest in direct private equity deals in the UK,” said Eric Barnett, chief executive of Kleinwort Benson. “Our pipeline has never been busier focusing on the UK mid-market, which we believe has responded very positively to Brexit.”

    “We believe the UK will remain a global centre for individuals and families seeking expert advice across a broad range of services,” Mr Barnett added.

    Société Générale acquired Kleinwort Benson in June this year.

    For analysts, the uncertainty thrown up by Brexit might actually provide opportunities for private banks and wealth managers. Wren Investment Office, a new multifamily office part-funded by US and Spanish backers, opened in London this week.

    “The need for good financial advice and money management has increased with the Brexit vote,” said Danny Cox, a chartered financial planner at Hargreaves Lansdown. “The wealth management industry is giving its vote of confidence by gearing up for the opportunities presented by structural change and improvements to Isa and pensions saving products.”

    The UK has recently experienced a wave of consolidation among smaller wealth managers and high-end financial advisers, with private equity groups in particular keen to capitalise on London’s increasingly buoyant financial advice sector.

    In April, Tilney Bestinvest — owned by Permira — snapped up rival Towry in a £600m deal, while March saw Liechtenstein’s LGT Group acquire a majority stake in Vestra Wealth, the London-based boutique.

    Now was not the time to leave the UK, said Lee Goggin, co-founder of “If you’re [a larger wealth manager] and you’ve made a big investment here, are you going to suddenly throw away £100m or so that you’ve invested in infrastructure, staff, etc?

    “For now — and for at least another couple of years — it will be business as usual,” he added.