London to Paris may be over but I’m yet to escape the world of cycling, writes Libby Ashby.
I spent a couple of days in Harrogate and Leeds this week ahead of Le Grand Départ, the opening stage of the Tour de France.
It was fantastic to see Yorkshire in all its glory, welcoming the Tour with yellow bicycles and cycling jersey bunting adorning the streets. I could certainly feel the buzz as I went from meeting to meeting, and all the wealth managers I met were very excited about seeing the race.
The Tour de France has launched Yorkshire on to the global stage and it should have a lasting benefit on the local economy. Dominic Key, senior investment manager at Leodis Wealth in Leeds, said: ‘Hopefully the Tour de France will do for Leeds what the Commonwealth Games did for Manchester.’
Key and I also discussed the discretionary investment community in the region. ‘The wealth management industry in Leeds is very competitive but I wouldn’t say it was overbroked,’ he told me. ‘There are opportunities in North and East Yorkshire as there aren’t many discretionary fund managers operating in that area at the moment.’
When I met Jonty Warneken, head of Sanlam Private Investments’ office in Harrogate, he expanded on this point, telling me about the dynamics of wealth management in the area.
‘The wealth management business in the North of England is based around relationships. Clients are loyal and expect businesses to be based locally,’ he said. ‘When operating or opening regional offices, as we have done recently in Teesside, you must be aware of the local issues and sensitivities.’
We went on to talk about the challenges investment managers face at the moment. Not only is it a difficult investment environment but there remain plenty of regulatory pressures. ‘It is difficult for businesses to plan for the future with constantly changing regulation,’ Warneken said. ‘The industry needs clarification on certain issues but most importantly, stability of regulation.’
During my meeting with Mark Arkwright, director at Gore Browne Investment Management in Harrogate, I was excited to hear the firm offers an ethical investment service as I have a keen interest in the sector. We talked about how sustainable and ethical investing is on the rise as there is growing consciousness about environmental and social issues. As a result, an increasing amount of Gore Browne’s clients are expressing interest in the ethical service.
We talked about the issues some investors have with sustainable investing. ‘Some criticise SRI for its exclusion of certain sectors, such as oil and mining or tobacco,’ Arkwright said. ‘However, figures show that sustainable strategies perform just as well long term.
‘We are wary of the heavily subsidised sectors though,’ he added. ‘Renewable energy, for example, is an area where government policies and subsidies play a dominating role. It is therefore important to do your research on these companies and carefully select those which aren’t dependent on the whims of those in Whitehall.’
Over a coffee in Leeds’ City Square, watching the Tour de France preparations around us, strategic investment specialist John Thornber of Andrews Gwynne shared his views on the current macro situation. ‘We are cautious in our global outlook. We can see another eurozone crisis happening but on the other hand, there is a genuine growth story in emerging markets.’
Leodis’ Key also commented on the global economy.
‘We are expecting volatility in the markets with the rise in interest rates, the end of quantitative easing and increased geopolitical tensions in the Ukraine and Iraq,’ he said.
Sanlam’s Warneken told me how an international wealth management firm can have an alternative view on the macro situation. ‘With Sanlam being a South African company, we do have access to a different perspective on global issues and that can be an advantage. We are in a new and difficult investment environment and while there are opportunities in markets, these are potentially dangerous times.’
So what is the best way to serve clients in the current environment?
‘It is essential to manage clients’ expectations in regards to the risk they wish to take against the potential return they hope to achieve,’ said Warneken.
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