These are just the most recent examples of the shift in wealth management towards larger firms - whether through mergers (Rathbones/ Investec) or acquisitions (Royal Bank of Canada/ Brewin Dolphin). As the use of passive funds and centralised investment processes have grown exponentially, costs have been suppressed, meaning that, for some, scale is everything.

I will leave for now the debate about whether shareholders are being prioritised at the expense of the clients. Instead, I am more interested in what has motivated the acquirers, particularly banks. 
Thanks to the ‘stickiness’ of private clients, wealth management offers the acquiring bank steady revenues, which are resilient to an economic downturn. Margins may not be that high, but there are plenty of ways to improve them through reducing costs and cross-selling with other parts of the bank. The danger is by doing so you damage the brand and lose clients and thus revenues.   

As ever, the determining factor of whether an acquisition is a good one is the price paid. The market’s immediate response was to baulk at the 15x EBITDA that NatWest paid for Evelyn’s £69bn of client assets - shares fell 5% on the news. What remains to be seen is how successful NatWest will be in retaining clients and their recurring fee-based income, while making their targeted £100m of cost savings. 
We do not own NatWest, but we do own Barclays in our Tenax fund. They were named as the other bidder for Evelyn and this marks the second time they have missed out on an acquisition in less than 12 months, after Santander beat them to acquiring TSB in July 2025. 

Will they be tempted to go again? It seems likely. Yet there is a diminishing pool of UK wealth management firms of sufficient size for a firm the size of Barclays to target. Top of the list could be Rathbones, now in excess of £100bn of clients’ assets after merging with Investec. Or considering that Barclays has a presence in the US through its investment bank, might they look at a US firm like Brown Advisory? The majority of their $170bn assets are in the US, but its international business based in London is the fastest growing.

As shareholders, we understand the rationale behind acquiring high-quality wealth management assets, but hope Barclays maintain the discipline around price they have shown until now. With interest rates moving lower in the US and UK, but slowly, and risk of recession seemingly low, the backdrop for Barclays remains supportive. At 1.0x book value, Barclays’ shares still trade relatively cheaply against its global peers. So, despite its share price rising by 218% in the last 2 years, in our opinion there remains plenty of room to deliver for shareholders simply by executing on its current business well, without overpaying for the last wealth management firm on the shelf.

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.