Patricia Sykes, partner at Hunters, tells Citywealth about trends in the UK property market, the young generations’ involvement in wealth management, and advising a client about moving money to Australia to escape a nuclear war.
Tell me about your role at Hunters.
I am a finance partner and for a number of years, I was head of our property department although this role has now passed to others in view of my impending retirement. My client-facing role is to give property advice to clients with an emphasis on those clients with landed estates and property interests and help families with the devolution of their property assets.
How has the private client industry changed?
Advisers are now very much more specialist than when I started in the law some forty-six years ago. This is necessary because of the constant changes in rules and regulations.
How is the UK property market doing?
The property market is going through a challenging period not helped by the high stamp duty land tax payable particularly on second homes which is depressing prices. This makes it more difficult to raise cash quickly. For our part, for years we have helped clients search for new ways to increase the yield from their property assets and produce the income and working capital needed. This has become particularly important where there are let properties where it is essential to do the work needed to make them comply with modern standards particularly energy performance certificates.
Tell us about interesting client instructions.
One of the more bizarre cases was a client who had escaped from Germany at the start of the last war and therefore knew what it was like to arrive in a foreign country with nothing. He wanted to place a sum of money in Australia and for that money to be available to his nearest relatives should there be a nuclear war. He had worked out that Australia was the most likely place to escape the nuclear winter which would follow a bomb. We had to come up with identification procedures and ways to arrange for payment in the event of such a global disaster.
What are the main challenges your clients are facing?
It is the expense of meeting regulation and maintaining and increasing income to cover costs. The most successful strategy is liquidation of non-core assets and reinvesting in higher yielding projects. Solar and wind schemes have been good but changes in government support have made new schemes less attractive.
Will the UK benefit from Brexit?
I fear that the combination of the cost and the limited access to the European market may be detrimental. From the point of view of landowners probably the greatest challenge will come from changes to the basic payment regime which will mean a period of uncertainty that may discourage capital investment in land.
What do you like about your work?
The cases which give me the most satisfaction are those where I have managed to avoid a split or bridge a gap between members of a family. Rivalry between siblings often has its roots in childhood and is very difficult to deal with. This often comes to a head in inheritance situations. Demonstrating a completely fair division of assets and balancing of interests can help to avoid tensions and disagreements between family members.
What’s the best piece of advice you’ve received?
Never to pretend you know when you don’t. Better to say 'I don’t know but I will find out and come back to you.'
What trends do you see?
I see a number of families where younger generations are involved in family wealth management at an earlier age which is better from lots of points of view, not least for capital tax. With greater life expectancy families need to hand over the reins earlier to allow the next generation to become involved to develop an interest in the preservation and enhancement of the family asset base whilst they are still young and have the energy and enthusiasm.
What do you do to unwind?
I do yoga regularly, tend my garden, and enjoy my grandchildren.