The exodus of client managers from UBS to the UK wealth management start-up, Vestra, is prompting many clients of the Swiss bank to jump to the more established UK firm of Cheviot Asset Management instead, Cheviot’s chief executive,Michael Kerr-Dineen, told WealthBriefing in a recent interview.

The exodus of client managers from UBS to the UK wealth management start-up, Vestra, is prompting many clients of the Swiss bank to jump to the more established UK firm of Cheviot Asset Management instead, Cheviot’s chief executive,Michael Kerr-Dineen, told WealthBriefing in a recent interview.

Cheviot is continuing to win over business from UBS because clients at the Swiss firm are worried there will not be enough UBS managers to oversee their money in the continuing exodus of CRMs, he said.

“Clients prefer the immediate certainty of having their money run by the well established Cheviot rather than start-ups such as Vestra who, it is believed cannot start fully operating for a considerable time given that they must give three months’ notice, then serve six months' non-compete (period) and also not solicit ex-client business for 12 months," he said. He continued: "With such a long gap, UBS clients fear they could be left in the lurch. As a result, clients are coming across to Cheviot instead particularly given the current market uncertainties”.

“Clients are flocking to us,” Mr Kerr-Dineen said. “This is a situation where UBS are seeking to mount a desperate rear guard action and Vestra paralysed on the sidelines.”

He said that Cheviot’s now well established position as a large, independent UK partnership with assets under management of around £2.5 billion had reassured clients about the management of their money. “There should only be one choice for clients,” he said.

His comments highlight the fierce battle in the investment industry to win over the custom of clients who have, or who might, defect from businesses such as UBS and other large wealth management firms which are contained within large banking empires hit by large credit-related losses.

Vestra was established by a former UBS employee, David Scott. Mr Scott left the Swiss bank in May last year after having sold his Scott Goodman Harris IFA business to UBS in 2004. Cheviot was created in 2006 when about 80 former Laing & Cruickshank employees that had been acquired by UBS subsequently joined Mr Kerr-Dineen.  Hence the rivalry between the two, as encapsulated in Cheviot’s recent advertisements:  "We Lead Where Others Follow”.

Mr Kerr-Dineen said that when Cheviot was set up, some of the people who are now heading to Vestra had dismissed the effort as a start-up venture, yet that is no longer the case, as Cheviot has already grown to be a substantial business.  “It is now ironic that Vestra will, when allowed, seek to promote the very start up which they tried to ridicule,” he said. He dismissed those joining Vestra: “With the odd exception, we got the A-team, they got the B-team.”

Late last month, in his first interview since the announcement of the Vestra business, Mr Scott told WealthBriefing that the current difficult market environment was an ideal time to start a new wealth management firm because clients were keen to review their arrangements.

Mr Scott has named the individuals joining from UBS Wealth Management UK as: Andy Sims, Neil Clark, Duncan Carmichael Jack, David Guild, Richard Wayne-Wynne, Neil Pedley, David Turner, Chris Verran, Sanjay Rijsinghani, Keith Merrick, David Guild, Colleen Robinson, Bryn Wright and Charles Bracher. Those joining from UBS AG are Francoise Marcus, David Blanc and Zoe Vucievic.

Responding to Mr Kerr-Dineen’s comments, David Scott said Vestra is ready to take on new clients from 1 August. He said this start date “has always been in line with our business plan”. He added: “Clearly, we have a number of advisors who are on gardening leave at present but we also have client advisors in place who are ready to take on clients from 1 August.”

“In addition to those joining from UBS, we have been successful in attracting advisors from other institutions who will be joining us shortly,” Mr Scott said.

“Vestra has been encouraged by the very positive response to its proposition and ultimately believes that clients  will make their own decisions on who they wish to manage their money based on the merits of that firm,” Mr Scott added.

UBS declined to comment.