Comment: A fine ‘Broemance’ cannot be allowed to end

MY FAIR maid at stockbroker Williams de Broe brings me dire news. One of the most distinctive names in private client stockbroking is to disappear. It’s one of the first results of the takeover by financial services giant Investec.

Williams de Broe, with offices nationwide, including Edinburgh and Glasgow, is one of the UK’s leading wealth management firms, managing more than £7 billion of assets. I hear the argument that names do not really matter that much, if at all. But I cannot be the only one unhappy with this, because actually, names do matter.

The firm, founded in 1869 by Baron Emile d’Eichtal (Gerald Williams entered the partnership in 1883, followed by Conrad de Broe in 1889) has long been a distinctive City name. I know that through many vicissitudes the present WdB is well removed from the original brokerage. But it stood for a certain individuality and distinctiveness which clients do value.

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Investec, for all its muscle, is just another big name of no particular history, character or distinctiveness, less a brand than a sort of industrial Hoover. Some may find it a bit rich that in the letter to clients announcing this change, for all the genuflection to catering for client needs, the clients have been given no choice whatever in the matter. Some may see that as an ominous pointer to further standardisation and loss of individuality in store.

I cannot for the life of me see the argument for losing one of the last names in private client stockbroking. Can I be the only one unhappy about this? The argument is, of course, that keeping different brand names make system integration all too difficult and cumbersome and stunt growth. Dearie me. How on earth did that tiddly little firm Unilever grow into the size it now is?

I lament this unnecessary name dropping and will adopt the same tactic as I did over the takeover by Brewin Dolphin some years ago, continuing to refer to the firm in Edinburgh as Bell Lawrie. It drove Brian Johnston close to tears.

Williams de Broe clients should raise the flag of rebellion: stand and resist to the last.

Curious how negatives have their positives

Who would dare invest in Europe now? You would surely need to have been a hermit for the past three years, or not quite right in the head to put any investment savings into a eurozone in recession, several of its economies in effective lockdown, German patience at breaking point, banks in deep crisis and political turmoil casting a deepening shadow.

So how could there be an investment case for “Europe”? Last week alone saw a 4.25 per cent fall in the Eurofirst 300 index, compounding a miserable performance for most of the past five years, with the Eurostoxx 50 index down by more than a third.

Sceptical about the future of the single currency we may be, this should not blind us to an indisputable fact about the eurozone. It contains some of the world’s most successful and innovative companies. Many are proven leaders in global export markets with winning products from cars to sophisticated hi-tech equipment, machine tools, consumer products and business know-how and services.

Despite the appalling macro-economic outlook, they are continuing to do well. And this crisis has handed them a gift: a weakening currency. Last week the euro fell to a three month low of $1.29 against the US dollar and it has fallen further against the Japanese yen. So, on top of an attractive product offer comes a devaluation rendering exports from companies in the single currency even more competitive in Western and Far Eastern markets.

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Experienced investors well know that it is just when the outlook is at its most bleak that we need to pay close attention to the investment case. But there is the potential for big rewards for those prepared to buy in when sentiment is leaning so heavily the other way.

And there is no doubt how miserable that sentiment is. Bleak news dominates everything about Europe. But that is also a powerful argument for keeping an eye out for value. Whether you view this as shrewd and opportunistic bottom fishing or the triumph of hope over experience matters less than the fact that some first-class companies are to be found. And they are standing on ratings considerably cheaper than those in the UK and US.

We may not yet be at, but are almost certainly close to, what value investor Sir John Templeton vividly termed the “point of maximum pessimism”. Templeton believed it was from just this type of abysmal situation that contrarian-minded investors could use to reap the biggest rewards. There is a vivid example of this wisdom close to hand. Few had the stomach to touch shares as the global financial crisis drove markets to multi-year lows in early 2009. But the MSCI World Index went on to rally 70 per cent from the bottom.

Leading players in investment trust sector specialising in Europe ex-UK include BlackRock Greater Europe, F&C managed European Assets Trust, Henderson Euro Trust and JP Morgan European Growth.

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