Brewin manager forecasts sunshine after the storm

JAMIE Matheson has come a long way since his first job as a "tea boy" at a wealth management firm in Glasgow.

In 1972 he started at Parsons & Co, which through a kaleidoscopic series of mergers and acquisitions over the course of 30 years, is now part of Barclays Wealth.

"I was a tea boy in my first job, I delivered the letters," the Glasgow-born stockbroker recalls.

Now the executive chairman of wealth manager Brewin Dolphin, Matheson has guided his company – and his clients – through the worst economic turbulence in his lifetime.

Last week, the firm revealed a gentle turnaround as it reported a jump in assets under management to 23 billion as its well-heeled clientele, and the value of their assets, began peeping out from under rocks into the pale sun of economic recovery.

"It is in my nature to try to see sunshine," said Matheson, whose optimism about the medium to long-term recovery in stock markets goes against strong bearish views that predict a decade of under-performance.

You could say his insistence on looking on the bright side is also a way to prevent herd panic among his clients. Typical patrons of Brewin Dolphin are not necessarily the big fish, but those with a few hundred thousand worth of liquid assets to protect. These are not the sort of people who like to risk their cash on a whim, but who come to Brewin for cautious advice.

For Matheson, the UK remains an important investment market. He dismisses fears that events in Europe, unprecedented public debt, the threat of inflation and the rise of emerging economies will marginalise the UK permanently in economic terms.

"May I be quite direct? I do not believe the UK is kaput, full stop," he says. "That is not optimism, it is realism."

Matheson sees sterling as a key strength. "The fact Britain has its own currency is very important. That doesn't demean problems that any nation, including Britain, may face but that gives us an extra area of flexibility in order to deal with the problems we have got."

He also sees hope in "anecdotal evidence" that the UK economy will be led by a recovery in manufacturing and industry. Likewise, the banks, laden with billions in so-called toxic assets, will also benefit from recovery, he insists.

"We would do well to bear in mind that out of that heap of toxic asset you will discover not everything is toxic," says Matheson. "There will be some rubbish but there will also be some that are far from rubbish. They will just not be at the right value."

But one of the looming threats to Matheson's genteel client base is the coalition government's proposals on capital gains tax (CGT).

Matheson warns that current plans to raise CGT on the sale of second homes and equities have threatened to "kill the goose that lays the golden egg".

"If you make CGT punitive, then there is a pretty fair chance that only those who absolutely have to pay it will pay it.

"It is widely expected CGT will change at some stage, but the clever thing for George Osborne to do is measure where the law of diminishing returns doesn't come in. I get the impression the Treasury and the Chancellor may well be listening."

As for Brewin Dolphin, competition is getting fierce in the staid marketplace north of the border where Brewin's Scottish operation – previously Bell Lawrie – has a major foothold.

A number of the UK's "big four" regional private client investment managers, which includes Brewin, Rensburg Sheppards, Rathbone Brothers and Charles Stanley, have been buying up portfolios and poaching teams from the weakened Scottish banks, while Barclays Wealth and Cazenove look to take advantage of "tectonic shifts" in the Scottish marketplace.

The Scottish land grab comes as analysts warn there may yet be tough times ahead for private client asset managers, given recent stock market volatility, leading to further industry consolidation.

Matheson is sanguine about the competition. "I have been in this arena since the early 1970s – it has been that way all the time."

Nevertheless, he is cautious about the future and is aware that investment certainties – the notion of blue chip stocks, the strength of the pound and even the EU – have been proven wrong. "I think we as a society made a mistake in ever assuming certainty," he says.

"Having said that, not even a novelist would have written the story of the last two years..

"What something like this teaches us is that the basics are important and if something is overly complex and looks to good to be true, it is."