With regret, you're fired
By Danny Cox | 30 Jul, 2008
It seems that the turmoil in Banking is not just confined to the lending side of operations. On the back of an announcement by UBS that it is merging some of its stockbroking business with its private banking operations, following the high profile departure of many of its staff to a competitor, HSBC Private Bank has announced that it is closing its stockbroking business, telling clients to leave by 1st October.
Clients who use their stockbroking services on an advisory basis or who have less than £1m invested all or partly in individual equities are being asked to leave, as are clients with discretionary managed portfolios of less than £300,000. Alternative advisory stockbrokers have been suggested.
What this tells us is that HSBC are trying to focus their operations on clients who are more profitable for them. It also suggests that their costs are significant per client portfolio and therefore to make profit they have to increase their minimum investments accordingly.
This move goes against much of the expansion of Private Banking businesses, which, arguably, have spent recent years expanding their client numbers rather than narrowing them.
Where does this leave these HSBC clients? Changing from one adviser firm to another is always a little awkward, particularly if you have worked with a firm for a long time. It would make sense to me to take this opportunity to review your situation, what service you need, what you have been getting, and whether the new service that you are considering meets your needs and expectations. These are the types of question I would be asking myself:
• When considering a new service, what is important to me? In a sense, when I look back in a year’s time, how will I rate the success or failure of this new relationship?
• What are my goals and aspirations?
• Where am I now relative to these goals and what do I need to change to get there?
• What bits are missing and how will this firm deliver them to me?
Of course different firms will offer different services. In my experience, perhaps the biggest way that a firm can distinguish themselves from the competition, is in the people they employ.
It is important to invest with a company you know and trust. It is not just the adviser that you meet who makes the service. It is behind the scenes and the functioning of the back office and support staff, which will frequently make or break the service.
The Hargreaves Lansdown Portfolio Management Service (PMS) is designed for those investors who have a portfolio of at least £100,000 and want to pass the reins of management over to a professional adviser who can select for them a discretionary managed portfolio of unit trusts and OEICS as opposed to individual equities. This suits those who are busy with other important things in their lives and are happy to delegate the management of their money to experts. If you would like more information on our Portfolio Management Service please call us on 0117 317 1690 or request a call back.
This contrasts with increasing numbers of clients want to make their own decisions, whether it is buying a share, a fund, an ISA or a SIPP. These investors enjoy researching and managing their investments, they save the cost of paying an adviser or wealth manager and benefit from acting on their own prerogative. The HL Vantage Service is designed for this type of investor, where investors can benefit from some of the best discounts on funds available in the UK and the support of highly trained teams, there to help you with any queries that you have.
If you have any questions about this or any other article from our experts, e mail asktheexperts@hargreaveslansdown.co.uk
