Big banks push into wealth is no threat, says boutique private bank

One of London’s oldest private banking institutions has sounded off on the influx of the British banking giants looking to grab a slice of the wealth management pie.

Andrew Salmon, the boss of Arbuthnot Latham, told City AM that when big bank rivals attempt to go “stratospheric” with their thresholds, it would benefit from its more “tailored” approach.

“If you want to get the personal service out of some of these bigger banks, you’re talking about having tens of millions [of pounds], not two to ten million,” the chief of the Aim-listed lender said.

Arbuthnot Latham requires new clients to bring at least £750,000 in deposits, investments, or borrowing. In 2025, funds under management in the bank’s wealth arm soared by over a fifth to £2.7bn. Total deposits at the group grew 11 per cent to £4.6bn, which Salmon described as a sign that the “model is working”.

The 19th-century bank does, however, stare down the barrel of rising competition to serve the country’s wealthiest. Natwest snapped up Evelyn Partners in a £2.7bn deal earlier this year, marking the firm’s largest takeover since the financial crisis and a clear indicator of its future growth priorities. Chief executive Paul Thwaite said the move created the group’s “third growth engine”.

Meanwhile, HSBC splashed $5m (£3.8m) on its luxury wealth centre in the heart of London last year as it targets becoming a top five wealth manager in the UK.

Arbuthnot’s wealth transformation 

But Arbuthnot’s success growing its AUM and attracting new customers, has also underscored the need to beef up its own services after what it refers to as the “hugely costly” impact of its personalised approach for customers.

Its wealth arm made a loss of £3m in 2025, narrowing from £4.9m the previous year. The bank is aiming to revamp the tailored approach through a major investment programme in new software, but savings aren’t expected until 2027. 

“We found that as we were growing the business and being successful, we’re putting more and more overhead into the business, because you needed to follow that growth with more costs. That’s not sustainable,” Salmon said.

The wealth arm also took a hit from changing client behaviour, ditching risky investments to buy simpler government bonds, which the bank earns small fees on, as well as a 17 per cent jump in shared bills associated with its recent office move.

The division is now targeting a return to profitability in 2026. On a group-level pre-tax profit came in at £24.2m, a decrease from £35.1m.

This came as operating costs tipped to £147m, from £139m, driven by an uplift in staff costs.

Salmon took aim at government policy over the last two years which has hampered business sentiment and driven costs up.

“It’s not a business-friendly government… [the national insurance tax hike] is not good. I think I’ve been shocking people recently by [pointing out] the amount we pay in rates – it’s all the taxes before you even get to corporation tax. 

“They’ve all just gone up.”

Britain’s brain drain

Ahead of the Autumn Budget the banking industry lobbied fiercely to skirt a highly-anticipated tax raid as the Rachel Reeves faced lobbying efforts from across the political aisle as well as former deputy Prime Minister Angela Rayner.

Banks are subject to a sector-specific levy that sits on top of corporation tax as well as VAT, property taxes, national insurance and other taxes levied on businesses.

The surcharge stands at three per cent, after being lowered from eight per cent under the Conservative government.

The delayed Budget – which took place on 26 November – caused many firms to hit pause on investment plans and countless business surveys pointed towards stifled growth.

“There was a huge slowdown in business in that sort of six to eight weeks before the budget,” Salmon said.

“I do have a fear that we’ll go through that loop all over again next September.”

Reeves raised taxes to the tune of £26bn in the Budget, with the target falling firmly on some of the wealthiest Brits through the likes of a ‘mansion tax’ targeting properties worth over £2m.

“How can you really expect accelerated growth in the economy if you keep taking money out [that] you would invest in the business?” Salmon said.

Such moves – as well as the £40bn tax raid in the 2024 Budget – had led to an exodus of Brits fleeing the City – dubbed a ‘brain drain’ – in hopes to find more favourable tax environments overseas.

“In the last year… We’ve seen – not a vast number, but quite a lot of conversations about – people moving abroad. And we have lost people abroad.”

He added: “It’s not just made up, people are leaving”.