Distributing Wealth Management Services in Europe 2003

Overview
Scope
Analyzes the results of a unique survey of 110 European wealth managers with data broken down by country and competitor type. Covers traditional face-to-face channels, referrals and intermediary distribution, Internet, call centres and other emerging channels. Analyzes both the nature and frequency of usage of different channels in dealing with new and existing clients. Explores industry opinion as to the future shape of wealth management distribution. Data and analysis covers France, Germany, Italy, the Nordic Region, Spain and the UK.

Introduction
Datamonitor’s report Wealth Management Distribution in Europe 2003 draws upon the results of Datamonitor’s unique survey of 110 wealth managers across Europe.
It delivers in depth data and rigorous analysis of the current and future state of play in the distribution of wealth management including the selection, development, usage, and costs of different distribution channels. The report provides the basis for successful strategic decision making in this field.

Reasons to Purchase
Delivers unique data on wealth management distribution to assist in investment
decisions and strategy formulation.
Allows competitors to benchmark their distribution strategies against overall
competitive practices in domestic and European markets.
Provides competitors with detailed insight into the future direction of wealth
management distribution including the potential of emerging channels.

Report Highlights
At a country level the use of newer remote channels has not impacted upon the desire of wealth managers to increase the number of client facing offices. 58 per cent of European wealth managers state that they have increased the number of offices in the last two years, while only 8 per cent claim the number of office has declined. In terms of face-to-face contact client visits to a branch or office are more common than for relationship managers visiting clients in their homes or client attendance at social functions or company sponsored events. For each method of face-to-face contact the frequency of client interaction can range significantly from over 4 times per year to infrequently or never. Overall existing clients are the strongest source of referrals for new clients with 33 per cent of European wealth managers stating that they are the source of “most” clients come from this source and a further 43 percent stating that they are the source of “many” clients. Referrals from third parties such as lawyers and accountants or financial intermediaries/advisors are generally less well used.

EXECUTIVE SUMMARY

INTRODUCTION
What is this report about?
Who is the target reader?
How to use this report

CHANNEL SELECTION AND DEVELOPMENT
Overview
Choice of channels
Recent development activity
Distribution costs
Implications
Survey data

ROLE OF DISTRIBUTION CHANNELS
Overview
Nature of channel usage
Variations by country
Variations by competitor type
Frequency of channel usage
Variations by country
Variations by competitor type
Implications
Survey data

REFERRALS AND INTERMEDIARY DISTRIBUTION
Overview
Comparing referral sources
Intra-group referrals
Referrals from existing clients
Financial intermediaries and advisors
Lawyers and accountants
Implications
Survey data

FUTURE DEVELOPMENT
Overview
Traditional channels
Newer remote channels
Implications
Survey data

APPENDIX
Research methodology
Datamonitor’s European Wealth Management Distribution Survey
Further reading
Datamonitor Reports
Datamonitor Global Wealth Service Briefs
Datamonitor Global Wealth Service Profiles
Do you need further information?
Datamonitor financial services consulting
SPP writing team

LIST OF TABLES
Table 1: Percentage of wealth managers with each distribution channel, by country, Q3 2002
Table 2: Percentage of wealth managers with each distribution channel, by competitor type, Q3 2002
Table 3: Average number of clients per client facing office, by competitor type, Q3 2002
Table 4: Percentage of wealth managers that have increased/decreased the number of client facing offices in the last 2 years, by competitor type, Q3 2002
Table 5: Percentage of wealth managers that have increased/decreased the number of client facing offices in the last two years, by competitor type, Q3 2002
Table 6: Wealth managers’ stated reasons for reducing the number of client facing offices in the last 2 years, Q3 2002
Table 7: Wealth managers’ stated reasons for introducing the new distribution channel, by channel, Q3 2002
Table 8: Average percentage of distribution costs accounted for by each distribution channel in 2001, by country, Q3 2002
Table 9: Average percentage of distribution costs accounted for by each distribution channel in 2001, by country, Q3 2002
Table 10: On a scale of 0 to 5 (5 being the most important) how important are the following channels for your company in acquiring new customers, by country, Q3 2002
Table 11: On a scale of 0 to 5 (5 being the most important) how important are the following channels for your company in acquiring new customers, by competitor type, Q3 2002
Table 12: On a scale of 0 to 5 (5 being the most important) how important are the following channels for your company in managing client relationships, by country, Q3 2002
Table 13: On a scale of 0 to 5 (5 being the most important) how important are the following channels for your company in managing client relationships, by competitor type, Q3 2002
Table 14: On a scale of 0 to 5 (5 being the most important) how important are the following channels for handling transactions and account maintenance, by country, Q3 2002
Table 15: On a scale of 0 to 5 (5 being the most important) how important are the following channels for handling transactions and account maintenance, by competitor type, Q3 2002
Table 16: How many times on average each year do your clients visit an office/branch? - by country, Q3 2002
Table 17: How many times on average each year do your clients visit an office/branch? - by competitor type, Q3 2002
Table 18: How many times on average each year do your clients get visited at home by a relationship manager? - by country, Q3 2002
Table 19: How many times on average each year do your clients get visited at home by a relationship manager? - by competitor type, Q3 2002
Table 20: How many times on average each year do your clients attend social functions or company sponsored events? - by country, Q3 2002
Table 21: How many times on average each year do your clients attend social functions or company sponsored events? - by competitor type, Q3 2002
Table 22: How often on average do your clients use your website for some functional purpose? (e.g. transactions, portfolio monitoring, order statements), Q3 2002
Table 23: For referrals what proportion of your new clients are referred from other parts of the company/ group?- by country, Q3 2002
Table 24: For referrals what proportion of your new clients are referred from other parts of the company/ group?- by competitor type, Q3 2002
Table 25: For referrals what proportion of your new clients are referred from existing clients?- by country, Q3 2002
Table 26: For referrals what proportion of your new clients are referred from existing clients?- by competitor type, Q3 2002
Table 27: For referrals what proportion of your new clients are referred from financial intermediaries/advisors?- by country, Q3 2002
Table 28: For referrals what proportion of your new clients are referred from financial intermediaries/advisors?- by competitor type, Q3 2002
Table 29: For referrals what proportion of your new clients are referred from lawyers and accountants?- by country, Q3 2002
Table 30: For referrals what proportion of your new clients are referred from lawyers and accountants?- by competitor type, Q3 2002
Table 31: How do you think the importance of client-facing offices in your home market will develop over the next two years? - by country, Q3 2002
Table 32: How do you think the importance of client-facing offices in your home market will develop over the next two years? - by competitor type, Q3 2002
Table 33: In the next two years, how do you expect the importance of referrals from other parts of the company/group to develop? -by country, Q3 2002
Table 34: In the next two years, how do you expect the importance of referrals from other parts of the company/group to develop? -by competitor type, Q3 2002
Table 35: In the next two years, how do you expect the importance of referrals from existing clients to develop?- by country, Q3 2002
Table 36: In the next two years, how do you expect the importance of referrals from existing clients to develop?- by competitor type, Q3 2002
Table 37: In the next two years, how do you expect the importance of referrals from financial intermediaries/advisors to develop?-by country, Q3 2002
Table 38: In the next two years, how do you expect the importance of referrals from financial intermediaries/advisors to develop?- by competitor type, Q3 2002
Table 39: In the next two years, how do you expect the importance of referrals from lawyers/accountants to develop?- by country, Q3 2002
Table 40: In the next two years, how do you expect the importance of referrals from lawyers/accountants to develop?- by competitor type, Q3 2002
Table 41: How important will the following channels become in the next two years for wealth managers? - Europe, Q3 2002
Table 42: Do you envisage having a dedicated wealth management website in the next 2 years? - by competitor type, Q3 2002
Table 43: Do you envisage having a transactional wealth management website in the next 2 years? - by country, Q3 2002
Table 44: Do you envisage having a transactional wealth management website in the next 2 years? - by competitor type, Q3 2002
Table 45: Do you envisage having a dedicated wealth management call centre in the next 2 years? - by country, Q3 2002
Table 46: Do you envisage having a dedicated wealth management call centre in the next 2 years? - by competitor type, Q3 2002

LIST OF FIGURES
Figure 1: Face-to face contact dominates but wealth managers’ attitude to newer remote channels varies across Europe
Figure 2: Existing clients are the strongest source of referrals, Q3 2002
Figure 3: Face-to face contact dominates but wealth managers’ attitude to newer remote channels varies across Europe
Figure 4: Private banks and universal banks adopt a similar attitude to channel selection with the exception of call centres
Figure 5: Universal banks serve 60 per cent more clients through each office than private banks
Figure 6: Italy has been at the forefront of increasing the number of dedicated wealth management offices
Figure 7: Universal banks have seen a more acute need to increase the number of wealth management offices/branches
Figure 8: Cost cutting has been the major motivation for wealth managers that have reduced client facing offices
Figure 9: Websites and call centres are primarily introduced to create an additional marketing or service channel
Figure 10: Face-to-face contact accounts for the vast majority of distribution costs across all European countries
Figure 11: Private banks divert a slightly larger proportion of distribution costs to the telephone
Figure 12: European wealth managers rate remote channels as more important for handling transactions and account maintenance
Figure 13: UK wealth managers place far less importance on face-to-face contact for handling transactions compared the rest of Europe
Figure 14: The Internet channel is considered more valuable for managing client relationships than new customer acquisition
Figure 15: Websites are underutilized for handling transactions in Germany and Italy compared with the European average
Figure 16: Attitudes to the importance of telephone/call center channels are more diverse for transaction handling than for other wealth mgt. activities
Figure 17: Post/fax are more important for transaction handling and relationship management than new customer acquisition
Figure 18: Private banks and universal banks adopt a similar view to the role of different distribution channels, Q3 2002
Figure 19: Client visits to a branch/office are more common than home visits or attendance at company events, Q3 2002
Figure 20: Only one fifth of clients will visit a wealth management website once a week or more regularly, Q3 2002
Figure 21: Italy, Nordic region and Spain have above average client usage of wealth management offices
Figure 22: Relationship managers visit clients at their home far more frequently in Italy and the Nordic region, Q3 2002
Figure 23: Wealth managers in France make far less use of social functions or company sponsored events to interact with clients
Figure 24: Private banks and universal banks have broadly similar client usage for different face-to-face distribution channels
Figure 25: Existing clients are the strongest source of referrals, Q3 2002
Figure 26: Wealth managers in the Nordic region make the strongest use of intra-group referrals, Q3 2002
Figure 27: Universal banks have a much stronger focus on referrals from other parts of the company/group, Q3 2002
Figure 28: Wealth managers in France rely most heavily on referrals from existing clients, Q3 2002
Figure 29: Private banks and universal banks receive a similar proportion of referrals from existing clients, Q3 2002
Figure 30: UK wealth managers receive the largest proportion of referrals from financial intermediaries and advisors, Q3 2002
Figure 31: Private banks have a stronger focus on financial intermediaries and advisors than universal banks, Q3 2002
Figure 32: UK wealth managers are also the most focused on referrals from lawyers and accountants, Q3 2002
Figure 33: Private banks and universal banks receive a similar level of referrals from lawyers and accountants, Q3 2002
Figure 34: German wealth managers do not generally envisage that the importance of client facing offices will increase, Q3 2002
Figure 35: A strong proportion of both private banks and universal banks believe the importance of client facing offices will increase
Figure 36: Wealth managers view referrals from existing clients and within the group as having the most future potential, Q3 2002
Figure 37: Italy envisages the strongest prospects for increasing intra-group referrals, Q3 2002
Figure 38: The potential to increase referrals from existing clients is viewed very differently across the European countries, Q3 2002
Figure 39: Very few German wealth managers see potential to increase referrals from financial intermediaries/advisors, Q3 2002
Figure 40: UK and Spanish wealth managers see the most potential to increase referrals from lawyers and accountants, Q3 2002
Figure 41: Private banks see more potential to increase referrals from financial intermediaries than universal banks
Figure 42: Wealth managers that do not use newer remote channels are more committed to building a website channel than a call center channel, Q3 2002
Figure 43: Universal banks are more keen to embrace newer remote channels for wealth management than private banks, Q3 2002
Figure 44: The majority of wealth managers believe the internet channel will be important or very important in the next 2 years