Why bankers can’t afford boats any more

Bankers might still be getting bonuses, but it’s not like the old days. They and their industry are being eclipsed by a whole new breed of entrepreneur.


It's not bankers buying the boats any more

I had chat with a boat broker friend in Cornwall this week. We were cruising round the harbour playing a fun game whereby he pointed at boats and I got to guess how much he had sold them for. I wasn't bad at it.

The interesting thing was not necessarily the price of the boats, but who had bought them. He was irritatingly discreet about his clients, but he did say that City people don't buy many boats the City is "not where the money is".

These days, he says, good bankers might still be getting good bonuses, but overall not many are making the serious lump sums needed to buy, moor and maintain a £1m boat. You need proper entrepreneurs for that.

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Read this week's magazine and you might be tempted to think that's a trend likely to continue. On the funds page, we look at two things that make the point nicely. Hector Reid looks at the "cut throat price war" in the index tracker sector you can now buy Blackrock's UK Equity Tracker for a mere 0.07%. That's the kind of price competition that has to hit margins in the end (I refer you to the supermarkets).

Then on the next page along, Matthew Lynn looks at what he sees as the "biggest threat to the City" crowdfunding. In the US, he says, it "won't be long before more money is raised for new companies from crowdfunding sites than from traditional venture capital sources". Wow. Crowdfunding is taking over the original point of the City to efficiently allocate capital. Lynn's column is jammed full of insight a must read.

If you then want to know how to get a piece of this trend towards alternative finance, you can turn to David C Stevenson's thoughts also in this week's magazine. He looks at the funds working in peer-to-peer lending that we can all invest in. P2P is different to crowdfunding (it is debt, not equity) but given that Lynn reckons there will be "very little" left of the City in a few years, MoneyWeek readers wanting to invest might want to take a look at them too.

They may well be lending the money to the next generation of boat buyers.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.