Ship shape for 2019
As thoughts turn to Christmas and the New Year ahead, we asked the wealth management industry what their thoughts are for 2019.
Some light in the tunnel for investors
According to Lee Morris, an investment director at Quilter Cheviot, “It will be another challenging year with increased levels of volatility”, but says there should be, “modest global growth with no imminent signs of a recession.” He adds, “Overall not a bad backdrop which should enable single digit growth, as long as it’s supported by household and business spending at sustainable levels.” Morris’ advice is to have “global equity exposure and some carefully selected diversifiers such as high-quality global government bonds.”
Preventing Personal Privacy Problems
Jeremy Eakin, a partner at law firm Schillings expects that in 2019, 50 per cent of those reading this article will be hacked. “Increasingly, a person’s privacy and security will come down to his or her ability to control the flows of information about themselves online”. So how do you ensure you aren’t one of the unlucky ones? He advises: “One of your New Year’s Resolutions, should be to review your digital footprint. This begins with an audit of all the information about you that is available online. By understanding this assessment and updating this information on a regular basis, you can begin to make informed choices and to spot where you may be vulnerable. ‘Prior Preparation Prevents Personal Privacy Problems’”.
Private equity headspin continues
Following the sustained private equity deal activity in the trust and corporate services industry throughout 2018, Leith Moghli, a private equity and investment funds partner at Reed Smith observes that: “The number of transactions involving fund administrators and depository providers has been remarkable. Indeed, such has been the volume of acquisitions, disposals and mergers that we have completely lost track of who owns whom in this sector. The demand is being fuelled by the “sticky” or annuity client relationships that these businesses tend to enjoy, and also the stellar returns that some of the earlier deals generated.” Moghli adds, “we expect the deal activity in this space to continue unabated.”
Jessica Roland, managing partner, Guernsey at Mourant believes client demand for evidence of diversity at all levels will continue to be a headline topic. “The benefits of building a diverse organisation have been proven time and again, not only as a competitive advantage, but to identify barriers and bias that prevent the development of talent and make your firm a great place to work. Your clients care about what you stand for and want to work with firms that have a culture of dignity and respect and a diverse range of people bringing ideas to the table for good decision-making.” She says: “Don’t wait until your clients ask. To drive change, be proactive with ensuring D&I is on the agenda, have robust policies and procedures in place that are applied and bring your employees with you on the journey.”
Everything for the Reg
According to Farah Ballands, CEO of Estera, the ongoing push from governments for transparency will continue, “the Crown Dependencies have stepped up to meet their regulatory responsibilities and this will carry on. She predicts that this will mean the asset value of new structures will increase as “new business is also likely to be more complex as it involves a raft of structures often with the need to provide future flexibility”. Ballands adds that trust structures will also be dominated by the theme for “succession planning,” saying “Clients continue to want us to help them transfer family assets to the next generation”. As for what UHNW families want from trustees in 2019? Ballands is pragmatic. “Good service and the ability to be flexible and commercial in the way we manage their structures.”
Banking squeeze breeds boutiques?
Jeremy Parlons, founder and managing partner at Bainbridge Wealth, an investment advisory boutique, believes that the current trading environment will see private banks put under more pressure as they continue to shoulder higher costs from regulatory requirements. He says, “this may well result in prized banking clients moving to independent boutiques as investing principles undergo fundamental change, caused by many factors including software developments”. “As pricing and performance get re-evaluated, there will be a shift away from traditional big picture investment management. I see a more systematic approach which is already starting in the institutional world of pension funds, insurance companies and asset managers.”