The wealth management industry in the UK
grew investment assets under management by 10 percent last year to
a total of £402 billion ($747 billion), regarded as a respectable
performance after financial markets began to erode in the latter
part of 2007 as the credit crisis struck home.

While this represented a slackening of
the pace from the 18 percent assets growth recorded in the boom
year of 2006, the private clients advisory industry still managed
to generate higher aggregate revenue of £3.9 billion, up 16
percent, according to new data by UK researchers Compeer. Pre-tax
profits of the 155 wealth firms it tracks grew to £1 billion, up 28
percent.

Meanwhile, Barclays Wealth continues to dominate UK wealth
management, according to data from another researcher, Private
Asset Management.

Barclays had £48.8 billion of client assets under management at the
end of 2007 in 700,000 client accounts (see page 2 for AuM
data).

Among the major firms, JPMorgan achieved the highest rate of
growth, putting on £7.3 billion of assets to total £30.2 billion
and taking fourth place overall.

Coutts & Co (£42.9 billion) and UBS Wealth Management (£37.0
billion) followed Barclays in second and third places respectively
in the UK wealth management league. They grew their asset base by
£6.4 billion and £6.1 billion respectively. Apart from JPMorgan,
other US firms continued to perform strongly in UK wealth. Goldman
Sachs International take 6th position with £19.8 billion of assets.
Morgan Stanley was in 9th position with £14.5 billion.

Brewin Dolphin, which has picked up a
number of advisers leaving Barclays unit Gerrard as the British
bank moves away from a brokerage model, was ranked in 5th
position with £21.6 billion. Brewin Dolphin also had the second
biggest number of client accounts at more than 110,000.

St James’s Place Wealth Management, a subsidiary of HBOS, entered
the Top 10 for the first time with £18.2 billion of assets at the
end of 2007.

It also had the third largest number of accounts with 80,000. If
HBOS decides to raise more cash by divesting its stake in St
James’s, as rumoured, this wealth firm is likely to see intensive
interest from a range of wealth players, domestic and
foreign.

Elsewhere, Lloyds TSB Private Banking took the 7th position with
£16.2 billion of assets.

Just outside the top 10 was HSBC, which came in at 11th with £14.2
billion. Merrill Lynch was 13th with £12.2 billion and Credit
Suisse 16th (£9.6 billion).

Among the fastest-growing firms was Towry Law, several of whose top
management are former Coutts bankers. It posted a 100 percent gain
in AuM to £2 billion. Stenham Advisors also performed strongly,
boosting assets by 56 percent to £2.6 billion.

Over the last three years, the fastest growing firm is Cheviot
Asset Management, a company which is now extensively staffed by
former UBS advisers. It has grown assets by 1,825 percent to £2.5
billion.

New data shows that the wealthiest segment in the UK population has
seen its assets grow by 70 percent since 2004, outstripping wealth
creation among all other classes.

The richest 1 percent of the population, totalling some 480,000
individuals, saw their assets jump to £3.9 million on average by
this year versus £2.3 million in 2004, Tulip Financial Research, a
consultancy, calculates. By comparison, the least wealthy part of
the population saw only a 30 percent increase.

Total UK liquid assets in private hands rose from an estimated
£1.74 trillion to £2.95 trillion over this period, Tulip
estimates.

The richest 5 percent of UK adults own close to 80 percent of the
UK’s total liquid assets, with the top 1 percent owning two-thirds,
or 65 percent.

“This massive concentration of liquid wealth into just 1 percent of
the UK population has major implications for the wealth industry –
for the UK’s stockbrokers, private banks and financial advisers
plus, of course, the companies designing, selling and marketing
financial products,” Tulip managing partner John Clemens
said.

“Identifying where the HNWIs live, who they are and how they decide
where and in what to invest are core priorities for all these
professionals and the businesses who employ them.”

Clemens noted that his wealth estimates, based on a proprietary
liquid wealth distribution model, is based on data compiled before
the full impact of the credit crunch was felt. The total fall in UK
liquid assets in 2008 to date is put well under 10 percent,
contrasting with the total expansion of liquid assets of the rich
by 70 percent in the past decade.

So the wealthy have remained wealthy and “are suffering far less
from the credit crunch than their less-wealthy brethren”, he
concluded.

For further analysis see:
Going into recession in good shape