Tough winter ahead but opportunities beckon, say wealth management experts

Professionals at wealth management business UBS remain cautiously optimistic about the regional and national economic picture as the country continues its recovery from the pandemic. spoke to Neil King, head of UBS Wealth Management’s Leeds-based Yorkshire office, and Dean Turner, UK Economist at UBS.

King said the economic shocks of the last 18 months had not deterred those people who are prepared to take a longer term view of their investments.

“Last year people were spooked by what happened with the markets – completely understandably,” he said. “But most of our investors are long-term investors and we didn’t see much of a kneejerk reaction from them.

“Things are now more normal in terms of how people are viewing the markets.

Neil King

“We’ve always advocated a diverse portfolio to align with our clients’ risk profiles. Most of our clients are balanced investors and their portfolios didn’t go down as much as the equity markets.”

King said UBS had begun focusing on sustainable investing about five to 10 years ago and expects to see ongoing increasing demand for it. He added there is also real political will to support these types of investments.

He said the impact of the energy prices crisis means there should be huge investments forthcoming in new, renewable forms of energy.

In his outlook for future economic trends, he said: “Anecdotally, when we talk to private equity houses, we see there is still a lot of cash which people want to put into good companies.

“In the last six months we’ve seen many deals made in Yorkshire, with businesses continuing to prosper. In our Leeds office we’ve seen serial entrepreneurs and other clients continuing to do deals.

“We have experienced a lot of positives since we first set up in Leeds. We started with one person here and that’s grown to a team of 10, which is testament to the number of clients we’ve brought on board.

“We have a good base of loyal clients, including many who’ve been with us since we began in Leeds 10 years ago.

“In terms of business activity we’re now on a par with our Manchester and Newcastle offices, which have been established for longer. Going forward we see plenty of opportunities in Yorkshire and Humber.”

Turner said: “One of the things we’ve been talking about to our clients is the transition to Net Zero, something which is really being highlighted by COP26.

Dean Turner

“While they probably won’t meet every single target at the conference, we’re still going to see much more investment in Net Zero which will require a lot of private sector capital. Governments can’t do it alone, so it’s not something we can ignore.”

Turner said he was relatively optimistic about economic trends for the next couple of years, despite short-term challenges.

“There will be headwinds and we are going to have a difficult winter,” he said.

“But with regards to the pandemic, we seem to be taking a very different approach now, dealing with it as something endemic for which lockdowns are not the solution.

“I don’t think we should overly fear major economic disruption during the winter months. But inflation and price rises are continuing and will go higher for a few months yet.

“The Bank of England will be looking to hike interest rates sooner rather than later. That’ll probably take a little bit of steam out of the recovery.”

He said data suggests levels of household savings remain high, which should give a boost to the economy. And he added people were determined to enjoy leisure pursuits denied to them when Covid restrictions were in force.

“In lockdown all we could do was buy goods but now we’re seeing a transition to the “Instagram Economy”, where people want to spend their money on more Instragrammable activities,” he said.