Wealth management in Scotland: eagerly expanding or viciously churning?
For a sector that is relatively small north of the border, wealth management has seen a decent number of high profile moves recently. But is this simply market churn or are firms genuinely expanding in Scotland?
To name a few people moves in recent weeks, Adam & Company has taken on ex-rugby player Andy Nicol as head of business development in a newly-created role; Standard Life Wealth has hired Ronnie Binnie as senior business development manager; Cornelian Asset Management has recruited Gillian Hepburn as associate director and Brooks MacDonald has poached Scott Lothian from Adam & Co.
There are obvious cross-overs (as well as Adam & Co's moves, Hepburn was previously business development manager at Standard Life), which suggests much of this recruitment has been necessary replacements.
Nonetheless, Cornelian Asset Management is still recruiting for its private client business, Standard Life Wealth is believed to be building its team in Edinburgh, as is Adam & Co, while Brook MacDonald has been aggressively expanding in Scotland.
Rathbone Investment Management has also added 16 new staff from Bank of Scotland to bolster its Edinburgh officer.
Add in the fact that Barclays Wealth continues to recruit north of the border and it all points to a sector in rude health.
Nonetheless, some industry practitioners remain sceptical.
"Firms are still generally cautious when it comes to hiring, revenue flows remain inconsistent and clients are wary after a period of dissatisfying returns," says Saftar Sarwar, managing partner of wealth managers Kingdom Capital Partners.
One assumption, of course, is that getting the right relationship managers on board will automatically mean they bring a healthy book of business to the company, but these roles shouldn't be firms' focus at the moment, suggests Andrew Herberts, investment director at Adam & Company.
"You can understand the push to recruit relationship managers, because after a difficult period companies need extra business quickly," he says. "But what clients are craving now is expert investment advice, and I believe it would be beneficial for companies in Scotland to recruit more heavily on that side of the business."
He adds that clients in Scotland are also generally more loyal to the company brand than the individual relationship manager, so firms shouldn't assume clients will automatically gravitate towards them along with the new recruit.
