Wealth managers face enormous challenges but are showing ability to cope
INCREASING risk and falling returns on investment are enormous challenges for wealth managers in Scotland, the seminar heard.
Prof Ben Jacobsen said returns on all investment asset classes were heading down – “a very difficult proposition” for wealth managers. However, he was “mightily impressed” by their ability to cope with a higher-risk, lower-return environment
He was very keen to study and better understand the relationship between risk and return in collaboration between the business school and the financial services community, he said.
Prof Jacobsen cited political risk as the biggest threat to the stability of financial markets.
He said Europe was “still on pretty shaky ground” – and favoured closer political integration. “When you live in New Zealand, you see the growing dominance of China and see what European countries have in common rather than their differences.
“The only way for Europe to make a fist of things in the long term is to unite; that’s a very important step in preventing long-term political risk impacting on markets.”
Disruptive technology will also have a major impact on financial markets because of the ability of “a 13-year-old kid to programme an application that could put big companies out of business”, Prof Jacobsen argued.
“That’s why Apple holds a tremendous amount of cash – because they know they can buy companies up if they need to.”