There is enough business for the European financial adviser community and the private banking sector to work side-by-side, according to a director at Blevins Franks Financial Management.
His comment came after Swiss private banking group EFG International announced it will open an advisory branch in Lisbon.
Jason Porter told International Adviser: “There will be examples where these two adviser communities do work together, but there are areas of overlap which means competition will exist.
“It will depend upon how far the private banking community wants to get involved in financial advice; rather than purely investment advice, where they operate at the moment.”
Coming back for the wealth
Porter also said that Portugal is become more attractive as property redevelopments continue apace in Lisbon, which can be partly down to the non-habitual residency (NHR) scheme and visa programmes bringing an influx of wealthy individuals from France, Spain, Britain, Russia and the Far East.
“This rise in wealth will inevitably attract back the private banking community, who left the wealthy in the lurch several years ago when they closed many of their operations in mainland Europe, retreating to the tax favoured locations of Luxembourg, Switzerland and Monaco,” Porter added.
“This may put some pressure on the Portugal-based IFA community, but that competition has been there before, and there was always enough business to go around.”
EFG’s Portugal branch, which is a subsidiary of its Luxembourg entity, EFG Bank (Luxembourg), will be fully operational by 1 September 2019, subject to regulatory approval.
Pedro Rego has been appointed head of the branch and will be responsible for developing the bank’s presence in southern Europe, which is a key market for the group.
The office has already recruited eight employees and EFG aims to approximately double the size of the team within the first three years.
It has also set itself the target of generating approximately CHF1.5bn (£1.21bn, $1.35bn, €1.54bn) of assets under management by 2022.
Adrian Kyriazi, head of continental Europe region of EFG International, said: “The launch of our presence in Portugal with an experienced team will enable us further to enhance our activities in southern Europe.
“We will concentrate on expanding our presence in this market.”
IA also spoke to Paul Stanfield, the chief executive of industry trade body the Federation of European IFAs (Feifa), to discuss whether private banking groups moving into the region will affect the business of advisers.
Stanfield said: “Generally speaking, private banks are usually looking to attract ultra-high net worth clients, and predominantly domestic market or indigenous individuals.
“They don’t, therefore, operate in the same space as most expat-focused advisory businesses.
“Therefore, if private banks do open more operations in southern Europe, or elsewhere across the continent, I wouldn’t expect them to compete directly with most of those advisory firms.”
Blevins Franks’ Porter concurred with Stanfield.
“We have operated before alongside the private banking community, and it hasn’t really impacted us and I would not expect it to this time round,” said Porter. “Our USP has always been the fact people come to us because they place importance on the all-encompassing advice they can get from Blevins Franks.
“Most UK nationals moving to Portugal will require UK-Portugal cross-border tax advice, financial planning, pension planning, inheritance and succession planning.
“Clients value this when it is delivered in a holistic, coordinated form.”