Why are Brewin and Collins Stewart piling up so much cash?

He said: 'It's going to be expensive. It depends on how they transition their business model. There is going to be implied costs and they could be setting aside cash now so that their future results don't suffer.'

Technology

Harvey also makes a point that spend on technology may be the reason behind the large cash pile.

As we have seen with the likes of Coutts and Barclays Wealth who have spent hundreds of millions of pounds on their IT platforms, technology upgrades are not cheap. While Brewin and Collins Stewart are nowhere near the same scale as those two private banks, they are sizeable companies and Brewin in particular has over 40 offices.

But the spend on technology for many wealth management groups wouldn't just be done for the sake of having faster operating computers, as much as that helps, but rather because it is a good investment through which you can cut serious operating costs.

As Harvey pointed out: 'Given the cost of delivering in the post RDR world, people are going to be looking at efficiency of their business model and their cost/income ratios.'

Acquisitions

As far as acquisitions though, one can not help but think that the main reason we have not had any substantial progress is mergers is because the price multiples have not come down. Kleinwort Benson was sold for more than 4x earnings, which is simply too high at this stage of the cycle.

When the price multiples of wealth businesses start resembling reality, we are likely to see some of this cash deployed. But there is a sneaking suspicion the catalyst for this change may just indeed be the RDR itself.