Liverpool stockbrokers deluged by calls from frantic investors after huge Wall Street falls

Oct 1 2008 by Alex Turner, Liverpool Daily Post

Brokers have been deluged by calls from frantic investors, as Alistair Houghton reports

STOCKBROKERS around Liverpool spent a large part of yesterday handling the fall-out of Monday night’s huge stock market falls on Wall Street.

Brokers and investment managers were forced to field calls from worried investors as the turbulence in the world’s financial markets reverberated around the world.

Andrew Morris, the director responsible Rathbones’ investment management business in Liverpool, said the number of calls his office received had grown in the last month as private investors sought assurance.

September saw many events that stunned the markets from the nationalisation of Freddie Mac and Fannie Mae in the US through to the collapse of Lehman Brothers and the rescue of US insurer AIG to the nationalisation of Bradford & Bingley. Mr Morris said: “It’s probably the most traumatic month in investment markets in my working life, and I’ve been working for Rathbones for 22 years.

“We are getting a lot more calls, primarily inquiring about the solidity of some of our financial institutions and banks.

“Our clients, who may have large cash deposits, have expressed concerns about a number of financial institutions. We’ve fielded a lot more calls regarding that than the state of the market, which is highly publicised in the media every waking hour.”

Mr Morris said some clients had also started sending cash to Rathbones to manage, rather than keeping it in banks.

Andrew Ramsbottom, fund manager at Royal Liver Building-based Tilney Investment Management, said the Tilney team was staying in close contact with its clients as the market volatility continued.

HE SAID: “We had a nearly 5% swing in the markets yesterday from when it opened to when it closed, but we’re getting used to it. It reflects the fact that nobody knows where we will go from here.

“In the last week, we’ve seen a lot of investors who are lucky enough to have more than £35,000 on deposit in any one bank slicing it up into tranches of £35,000 and distributing it around. Most clients seem to be phlegmatic about the situation. It couldn’t have been predicted.

“It’s a two-way thing with our clients – they ring us and we ring them. The last thing we want is clients sitting there worrying whether or not we’ve remembered them.”

Richard Arthur, of the equity sales desk at Shore Capital, said he had expected a “rough ride” yesterday but was pleasantly surprised the market closed in positive territory.

“But this was on the back of the market falling 5% the previous day,” he said, “and it’s still below 5,000 points – which is no great shakes.”

Shore deals with institutions rather than private individuals and so has not had to field calls from worried private investors. But Mr Arthur said all investors were concerned about the volatility of the market and whether the US bail-out plan will be enough to stop the slowdown.

“I’m not talking to too many optimists,” he said. “Even in the event that the bail-out is achieved, the perception generally is that’s not the be-all and end-all.”

Carl Cross, investment director at Liverpool wealth management firm Rensburg Sheppards, said he felt clients were “relatively relaxed” about what was happening to other banks as they had seen what had happened dur-ing Northern Rock’s troubles last year and so were more aware of the protection their savings had.

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alistairhoughton