Wealth managers' sturdier income streams justify their premium valuations over their fund management rivals even in the face of all-time UK and US stock market highs, analysts have said.
The wealth management sector is trading at an average 21 times forward earnings, while asset managers are trading at just 14 times, according to date from S&P Capital IQ. With some equity markets at particularly punchy levels and political risk rising, some may wonder whether wealth management's rating is warranted.
Wealth managers Brewin Dolphin (BRW), Brooks Macdonald (BRK) and St James's Place (STJ) all released bullish updates last week. SJP had net inflows of £2.1bn during its final quarter and investment gains of £1.9bn, taking funds under management beyond £75bn.