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Shifts in the UK Wealth Management Landscape

Datamonitor
September 22, 2009
SKU: DFMN2445037

Abstract Table of Contents Search inside this report Related Reports

Countries covered: United Kingdom

Introduction

The UK wealth management market has been turned on its head as events have changed the nature of Britain's high net worths (HNWs) and altered the competitiveness of private banks. This report describes the nature of the competitive and customer changes that have taken place, and provides recommendations as to what wealth managers need to do to succeed in this new environment.

Scope

Analyzes the data contained in Private Asset Managers 2009
Draws on the results of Datamonitor's Wealth Management Market Leaders Survey

Highlights

In 2008, significant numbers of British HNWs moved their business away from the larger wealth managers toward the small and medium providers. Damaged brands, images and reputations and questions over the financial stability of the larger providers partly account for this shift, but the overloading of relationship managers also played a part.

The crisis has resulted in important attitudinal shifts in the UK's HNW population. HNWs are more demanding in general, and seeking greater contact with their relationship managers. There are significant numbers looking to participate in the market recovery and these individuals want their bankers to be proactive with investment suggestions.

Going forward, the larger players will need to address several areas of weaknesses, especifically the relative shortage of relationship managers within their organizations. The smaller and medium-sized players need to focus on taking clients in the short term, and holding onto them and growing their share of wallet in the longer term.

Reasons to Purchase

Understand the changing competitive landscape in the UK, and the reasons underlying this
Gain insight into the shifting attitudes of HNWs and what this means for wealth managers
Learn what wealth managers need to do in the short, medium and long term to keep and capture clients

Overview
Catalyst
Summary
Methodology
Executive Summary: Large players have lost ground to their smaller competitors, and there is plenty for them to be worried about going forward; In the wake of the crisis, HNWs are wanting more banker contact and less mistakes; Larger wealth managers need to address the overloading of relationship managers, while smaller wealth managers need to exploit the window of opportunity
Table of Contents
Table of figures
Table of tables
COMPETITIVE CHANGES IN THE UK WEALTH MANAGEMENT MARKET: The largest players in the UK wealth management market have been severely tested and the rankings are changing; The total assets under management by the top 25 providers fell in; For many wealth managers, the changes in AUM and total clients in 2008 went in opposite directions; The total number of staff has swollen and contracted in line with the movements of AUM; The larger players have lost ground to their smaller competitors, and there is plenty for them to be worried about going forward; Large wealth managers were soundly beaten in 2008 by the medium and small-sized players; Fundamental weaknesses around perceived financial stability, brand and personal relationships are contributing to the larger wealth managers' problems; The larger wealth managers appear to be overloading their relationship managers with clients; The relative overloading of relationship managers within larger wealth manager is not likely to ease in the near future
CUSTOMER CHANGES IN THE UK WEALTH MANAGEMENT MARKET: In the wake of the crisis, HNWs are wanting more banker contact and less mistakes; There is a large group of HNWs wanting to profit from recovery; Not making errors is seen as being key in retaining HNW clients; Increased face-to-face contact is the key to increasing share of wallet
STRATEGIC RECOMMENDATIONS FOR UK WEALTH MANAGERS: Larger wealth managers need to address the overloading of relationship managers and work on quality, while smaller wealth managers need to exploit this window of opportunity; Key action one: avoid cutting support staff-do not underestimate their importance; Key action two: Recruit good relationship managers and get client loading ratios to an acceptable level; Key action three: Assess damage to brands, images and reputations and seek to rectify problems
APPENDIX
Methodology
Private Asset Managers (PAM)
Wealth Management Market Leaders Survey
Bibliography
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
List of Tables: Table 1: AUM within UK wealth managers in 2007 and; Table 2: Changes in AUM and total clients in; Table 3: Changes in total staff and relationship manager compared with AUM growth; Table 4: Changes in 2008 AUM, client base and discretionary/advisory split; Table 5: What will determine HNWs' choice of wealth management service over the next two years?; Table 6: Relationship managers within large providers do appear to be stretched compared with those in smaller providers; Table 7: In 2008, small and medium-sized players were strong recruiters; Table 8: What are HNWs demanding today?; Table 9: What is the best way to retain clients today?; Table 10: What is the most effective means of increasing share of wallet today?; Table 11: Large wealth managers would have to vastly increase the number of relationship managers to reach the client loading factors of the smaller players; Table 12: Large wealth managers would have to vastly increase their numbers of relationship managers to reach the loading factors of the smaller players
List of Figures: Figure 1: UK HNWs are most influenced by personal relationships in their choice of wealth manager; Figure 2: UK HNWs are looking to ways to profit in the current environment; Figure 3: The best way for wealth managers in the UK to retain HNW investors is not to make errors; Figure 4: The best way for wealth managers in the UK to increase share of wallet is by increasing face-to-face contact; Figure 5: The relative client loading of the different sized players in the UK market and its impact on quality of service; Figure 6: Large wealth managers contact clients on the telephone less frequently than smaller players; Figure 7: The larger the wealth manager, the less frequently their relationship managers meet up with HNW clients

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Shifts in the UK Wealth Management Landscape

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