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Wealth Management in Hungary 2009

Datamonitor
August 27, 2009
12 Pages - SKU: DFMN2429861

Abstract Table of Contents Search inside this report Related Reports

Countries covered: Hungary

Introduction

The wealth management market in Hungary is becoming much more competitive, spurred on by the growth of domestic providers. Hungarian high net worths, however, remain unsophisticated and staunchly conservative when it comes to investments. To succeed in the country, wealth managers need to know what this lucrative customer wants from them, in terms of products, services and interactions.

Scope

Sizes, segments and forecasts the number of affluent individuals across 10 liquid asset bands from EUR50k.
Primary research among domestic wealth managers provides insight into HNWs and the private banking market.
Utilizes Datamonitor's proprietary Wealth Management Opportunity Index to score the attractiveness of the market.

Highlights

The steady growth that characterized the Hungarian economy has given way to a rather poor performance and the country faces a difficult path back to stability. In spite of this, Datamonitor's figures show that the number of Hungarian affluents actually grew in 2008, thanks in good part to a preference for more conservative investment products.

Hungarian HNWs are relatively unsophisticated and conservative when it comes to their wealth, although their rather simple portfolio allocations are swayed by high interest rates. Wealth managers need to cater for this by offering them: personal service; low risk, understandable products; and customized education in investment matters

The competitive landscape of the Hungarian wealth management market has seen important changes over the last decade, with a number of international wealth managers gaining a presence in the market. However, it is the domestic bank, OTP, which occupies the number one spot in Hungary's wealth management landscape. This report profiles OTP.

Reasons to Purchase

Understand the opportunities for foreign wealth managers in this market through business success insights from the major players.
Assess market attractiveness by reviewing size and growth forecasts for the potential wealthy client base five years ahead.
See how the Hungarian wealth management market scores against Datamonitor's Opportunity Index.

Overview: Catalyst; Summary
Methodology
Executive Summary: Conservative attitudes to saving and investing have served Hungarian investors well recently; HNWs are unsophisticated on investment matters and very conservative; Hungary has become much more competitive for wealth managers; Table of Contents; Table of tables; Table of figures
HUNGARY'S WEALTH: Hungary is a nation deep in recession; Prior to the recession, the country was borrowing excessively, exacerbating Hungary's vulnerability; Hungary faces a difficult path back to economic stability; Structural reforms are required to aid recovery; Hungary has experienced mixed economic performance over the past five years; The Budapest stock market has performed relatively poorly over the past five years; Higher interest and money market rates have helped Hungarian investors in the last couple of years; Hungarian investors like to play it safe with their money; Deposits dominate the portfolios of Hungarian investors; Despite the recessionary environment, the value of Hungarian HNWs' assets increased in 2008; There was a small increase in the number of affluents and the value of their assets despite the economic and financial upheaval; HUNGARY'S WEALTH MANAGEMENT MARKET; The Hungarian wealth management market is developing and providers need to focus on improving their offering; The Wealth Management Opportunity Index; Wealth management market features; Range of products and services: 2; Level of consolidation: -2; Ease of market entry: 0; Level of international wealth management activity in the country: -2; Level of use of onshore services: 3; Level of demand for high quality service: -2; Case study: OTP Bank's wealth management offering has grown phenomenally well but faces real difficulties in the current economic environment; OTP wealth management commenced operating in the late 1990s; OTP has greatly increased its client base and assets under management since it restructured in 2002; The bank's wealth management offering is built around two customer segments; OTP wealth management has experienced tremendous product development on an open architecture platform; Offshore services are not currently a feature of OTP's wealth management service offering; A developing market under real economic pressure makes the work of a wealth manager very difficult; OTP is not waiting for recovery before launching a client education program
Appendix: Datamonitor's Wealth Management Opportunity Index; There are five key parameters when assessing a market for its wealth management potential; There are 18 components to the five key parameters of the wealth management opportunity index; Institutional factors; Economic variables; Wealth management market size; Wealth management market features; Wealth management client characteristics; Definitions; The drivers of growth in the wealthy population; Income growth (combined with inflation, changes in GDP by sector, household savings rates and debt levels); Investment returns (market capitalization, interest rates and bond yields); The following measures are not, in themselves, drivers of wealthy population growth; Market capitalization; GDP; The following measures are not drivers of wealthy population growth except under very restricted circumstances; Primary residence value growth; Inheritance
Methodology: Global Wealth Model; The UK sub model; Global sub model (for all other countries); Forecasting methodology; Continuous refinement to the understanding of liquid wealth distribution; Datamonitor's wealth numbers compared with other wealth numbers; Bibliography; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: The rate of unemployment and average nominal wage growth in Hungary and Europe, 2004-2008; Table 2: Inflation has been variable, although generally relatively high, in Hungary between 2004 and 2008; Table 3: Market capitalization of Central and Eastern European stock exchanges; Table 4: Short-term deposit and money market rates, and change in consumer prices in Hungary; Table 5: The portfolio allocation of retail investors in Hungary; Table 6: Number of individuals in Hungary in euro bands (000s); Table 7: Forecast number of individuals in Hungary in euro bands (000s); Table 8: Value of onshore liquid assets in Hungary in euro bands (€bn); Table 9: Forecast value of onshore liquid assets in Hungary in euro bands (€bn); Table 10: Wealth Management Opportunity Index - Hungary; Table 11: Wealth Management Opportunity Index with values - Hungary
List of Figures: Figure 1: The unemployment rate in Hungary now eclipses that of Europe as a whole; Figure 2: The Budapest Stock Exchange has had a battering over the past five years; Figure 3: Deposit and money market rates have been high in Hungary, above the European average; Figure 4: Deposits dominate retail investors' portfolios in Hungary; Figure 5: The number of wealthy individuals in Hungary is set to continue to increase after 2009

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Wealth Management in Hungary 2009

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