What's going on?
On Wednesday, British money managers Brewin Dolphin and AJ Bell followed US investment managers like BlackRock in reporting a reduction in the amount of cash they look after for customers, following last quarter’s stock market turmoil.
What does this mean?
Brewin flagged a drop in overall assets under management last quarter, including a 7% dip in “discretionary” funds, where investment managers have control over their customers’ portfolios. But that was due more to the decline in the value of the overall stock market than investors pulling funds – unlike at leviathan competitor BlackRock.
AJ Bell, which successfully listed shares of its own on the British stock market last month, saw 20% more money entering its coffers last quarter than a year before. Although it too saw total funds decline thanks to market swings, it benefited from an onslaught of new customers…
Why should I care?
For you personally: Play the long game.
As greater “pension freedoms” have rolled out since 2015, enormous numbers of Brits have swapped their company schemes for the likes of AJ Bell. American workers arguably have an even greater measure of control over how their 401(k) plans are invested. But wherever you and your pension are in life, your best bet is probably to weather market storms – and not jump ship when seas get choppy (tweet this).
The bigger picture: Rough Wednesday for British banking.
Spain’s Santander announced that it would close 20% of its UK branches this year as customers increasingly bank online. And one business taking the opposite approach, British “challenger” Metro Bank – the first new British bank in 150 years when it launched in 2010 – saw its stock plummet 39% after it reported lower annual profit than investors expected. Offering lower lending rates to attract new business puts Metro in a challenging position as base interest rates rise; and matters weren’t helped by an extraordinary accounting blunder.