In recent months, wealth managers in the UK have observed a notable increase in inquiries from US-based investors who are expressing concerns about the actions of former President Donald Trump and his administration. These concerns have prompted many of these investors to explore the possibility of relocating their assets to the UK, leading to a significant rise in wealth transfers.

Prominent wealth management firms, including Rathbones, RBC Brewin Dolphin, Evelyn Partners, and Schroders Cazenove, have reported to the Financial Times that a growing number of US clients are not only seeking to move a larger portion of their wealth to the UK but some have already initiated this transition.

Toby Glover, the chief executive of Schroders US Wealth Management, emphasized the surge in activity, noting, “There has been a significant increase in new client inquiries and assets over the past year, with a very noticeable uptick over the first three months of this year.” This surge seems to correlate with rising apprehensions regarding financial security during politically tumultuous times.

Nick Ritchie, senior director at RBC Wealth Management, echoed Glover's sentiments, stating that the volume of inquiries from US clients is “markedly higher” compared to the first term of Trump's presidency. Many of these clients are contemplating moving between 5 and 50 percent of their wealth to be managed in the UK or the Channel Islands, with the majority leaning towards the lower end of this spectrum.

Ritchie attributed this movement to “safety and security concerns,” mentioning clients opting to transfer their assets into trust accounts rather than holding them in their personal names for an added layer of protection. “It’s their getaway money,” remarked James Blosse-Lynch, an investment director at Rathbones, underlining the urgency behind these financial moves.

Blosse-Lynch shared a specific case where a client decided to reposition his investments, transferring a quarter of his wealth to be managed in the UK, a stark contrast to the much smaller amounts previously allocated. Although he noted that it’s still “early days” in the new presidency, he affirmed that discussions with other potential clients are gaining traction.

On the political front, the Trump administration made headlines on Wednesday with the announcement of sweeping tariffs on US imports, which led to a catastrophic response in the market, wiping out an estimated $5.4 trillion in US stocks within just two days.

Roy Clouse, senior investment director at Canaccord Wealth, observed that there is a growing apprehension among investors that Trump is increasingly operating outside established rules and conventions. This unpredictability raises concerns about potential legislative changes that could affect investors' abilities to engage in foreign markets and currencies.

Interestingly, while US wealth managers report a spike in inquiries from American clients, the trend contrasts sharply with the movement of wealthy individuals from other countries who are leaving the UK. This exodus largely stems from the UK government's recent decision to abolish the “non-dom” tax status, which previously allowed non-domiciled residents to benefit from lower taxes.

Nick Reeves, a financial planner at Evelyn Partners, pointed out that while many wealthy international individuals are moving away from the UK, there has been a noticeable uptick in queries from American investors. He recalled a client who intended to shift assets out of the US legal system to purchase property in the UK, wary of potential asset seizures.

To fill the gap left by the non-dom status, the UK government has introduced a new tax regime, which allows new residents to be exempt from taxes on foreign income and gains for their first four years in the country, provided they have been non-resident for the past decade. After four years, however, these new residents must pay taxes on their worldwide income and gains.

Some financial advisors are speculating that American investors may be using the UK as a temporary solution as they weigh their longer-term options. “The UK may be acting as something of a car park,” Ritchie commented, suggesting that clients are also exploring moves to other jurisdictions like Italy, Switzerland, and Dubai while using the UK as a short-term haven.