Wealth Management Breakfast

31 October 2014

Five Finance and Investment Students attended for the sessions on Wealth Management. The Business School’s Professor Ben Jacobsen opened the event, and Peter Jones, Bill Jamieson and Haig Bathgate also spoke.

The Radisson Blu Hotel hosted the Scotsman Conference Referendum Breakfast on Wealth Management on the 30th of October. The conference was in association with Turcan Connell who had Haig Bathgate, chair of Asset Allocation & Implementation Committee, to sit on the panel and present.

The Chair, Peter Jones, briefly welcomed everyone to the event and introduced the first speaker, Professor Ben Jacobsen, recently appointed chair of financial markets at The University of Edinburgh. Professor Jacobsen opened his presentation with what he believed to be the worrying aspects facing the wealth management industry in the foreseeable future. These points included issues such as the potential growth of the Ebola crises, as well as a future asset bubble in the lending market.

Professor Jacobsen, having recently joined the University from a position in New Zealand was able to objectively look at the issues facing Europe from an outside perspective. This was particularly interesting as he was able to address issues that may not be as evident to people that have not been exposed to geopolitical issues from a more global perspective. He then led on to describe the most prominent risk to asset managers as the political issue of China’s dominance in the global market. He believes that, due to their dramatic increase in power over the previous decade, that they will inevitably use this overwhelming power they now command. When this happens it is likely to be disruptive to financial markets all over the globe.

Before addressing the potential positives within the future of the wealth management sector he discussed John Swinney’s proposed property tax that will go into affect April. This is likely to cause decreased property demand at higher levels, above £500k, and drive prices up in the market below £500k, as buyers are less likely to want to pay the burden of additional taxation. Jacobsen closed by elucidating that the research he has done has shown that Halloween is an effective time to get into the market. Historical data has shown that market returns are much greater over the winter period than the summer.

Bill Jamieson, founder and editor of Scot-Buzz, then took to the podium. He opened by addressing the issues facing Scotland in the venture capital sector. The Scottish macro economic background does not compare with the dealings in London. He addressed the complete lack of IPO’s that we deal with as a nation and how the government, unsuccessfully, has made it blatantly obvious their goal over the last 15 years has been to attract the brass name plates and head offices of large companies to Scotland. He addressed the issue of the lack of focus of politicians in relation to the opinions of the over 65’s in the run up to the referendum, who voted predominantly no. As we have an aging population the growth of this demographic is larger than any other and we should make it apparent to listen to the quiet voices of the retired class.

Haig Bathgate from Turcan Connell was last to address the intrigued crowd of around 40 attendees from varying backgrounds. The effect of the referendum as a catalyst for the devaluation of the pound against the dollar was his opening remarks. The pound still hasn’t returned to levels it was against the dollar a few weeks before the referendum. Bathgate then talked about the current account and fiscal deficit in the UK. Debt to GDP is now at 90%, which is almost equal to that of Spain, which has the potential to be disastrous if not addressed.

In the run up to the referendum, financial sector jobs fell around 20% in Glasgow and Edinburgh while Manchester and Liverpool saw increases in excess of 45%. The asset management industry is now facing a huge tax and devomax uncertainty with the SNP requesting full fiscal control, which would be a dramatic increase from their current 7.5%. On top of this there is the potential issue of the UK leaving the EU next year in response to a successful Conservative performance at the general election.

Overall the breakfast was a very informative and successful start to a relatively dreich Thursday morning in Edinburgh. After staying for 45 minutes to catch up with people’s opinions, the general consensus was overwhelmingly positive. It was incredibly useful to be able to meet so many industry professionals from Edinburgh Thanks to The Scotsman for providing the student places to us.

Cameron Nelson