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Wealth management super league 2008

Datamonitor
January 26, 2009
287 Pages - SKU: DFMN2104611

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Introduction

This report looks at organizational scale in the private wealth management market. It examines the forces behind the emergence of large scale international private banks and compares and contrasts the strategic development of five of the world's largest players. It profiles the key players and discusses their current strategies and progress.

Scope

Organizational scale in the private wealth management market, covering the major European and US wealth management firms.
Key financial performance indicators of the top five wealth managers over the last three years.
Strategic opportunities for wealth managers in an economic downturn.

Highlights

This year has brought significant changes so the wealth management landscape with several of the largest players in 2007 ether combining forces this year, or dropping out of the ranking altogether. Major players have also not been able to escape the economic turbulence that has engulfed 2008.

One of the most profound recent changes to the industry has been the completion of the purchase of Merrill Lynch by Bank of America. One of the real jewels in Merrill Lynch's crown is its wealth management business, with an enviable track record in terms of consistency, profitability and internationalization.

Strategic opportunities for wealth managers in challenging times include a better quality of service to aid customer retention. Increasing share of wallet opportunities will enhance the institution's market position in a downturn, while customer acquisition opportunities in a downturn need to revolve around boosting the company profile.Reasons to Purchase

Quantitatively assess your performance through 2008 against the world's largest wealth managers.
Understand the strategic development of the five largest super league players.
Gain insight into strategic opportunities for wealth managers in challenging times.

Overview: Catalyst; Summary; Methodology; Executive Summary; The wealth management industry has been buffeted by 2008's economic turbulence; UBS remains the largest wealth manager for now; UBS: battling to remain the number one wealth manager; Credit Suisse is not as big as UBS,but it scores well against a number of key measures; Morgan Stanley's wealth management service has achieved better results than the rest of the bank; Bank of America: gearing up for the big swallow of Merrill Lynch; Citigroup has performed well in the good times,but is being tested at the moment; STRATEGIC OPPORTUNITIES FOR WEALTH MANAGERS IN CHALLENGING TIMES; Table of Contents; Table of figures; Table of tables; MARKET LANDSCAPE: TURBULENT TIMES IN THE WEALTH MANAGEMENT INDUSTRY; There have been significant changes among the top global wealth managers; Assets under management of the super league has grown since 2005 but by widely varying rates; Santander has seen phenomenal growth in its AUM as a result of organic growth and acquisitions; HSBC and Citigroup have also seen strong growth over the last three years,although far below that of Santander; The wealth management super league has experienced mixed fortunes in financial performance over 2007 and 2008; In terms of AUM,UBS is in a league all of its own,but its growth rate between 2005 and 2008 was weaker than most others; HSBC has seen the greatest assets under management compound annual growth in 2007,but growth stagnated in 2008e; The smaller wealth managers achieve better cost-income ratios than the bigger players; UBS has not fared well in terms of its cost-income ratio in 2007 and 2008; Revenues have declined,costs have risen and profitability has fallen for most wealth managers over 2008; Citigroup managed to contain its costs better than others over 2008; The scale of UBS appears to have little effect on the bank's overall efficiency; Bank of America Premier Investments' profitability fell by nearly two thirds between 2007 and 2008; HSBC enjoyed a small rise in profitability in 2008; Client relationship productivity measures differ markedly across the super league; Credit Suisse leads the way in terms of AUM per client relationship manager,although UBS International and Switzerland is not far behind; Credit Suisse also has the highest revenue and profit per client relationship manager; UBS topped the league in terms of how much new business their RMs brought in on average during 2007; CASE STUDIES: PROFILES OF THE TOP FIVE WEALTH MANAGERS; UBS: battling to remain the number one wealth manager; Financial turmoil in 2008 saw large withdrawals from the wealth management division of UBS and ultimately the break-up of the universal bank model; The UBS model covers the full gamut of a personal wealth management service; UBS Wealth Management has an aggressive attitude towards growth,particularly in the APAC region; UBS will have to battle to restore its reputation as the number one bank; Credit Suisse: still forging ahead with its expansion plans; Credit Suisse is not as big as UBS,but it scores well against a number of key measures; Credit Suisse is following a well-rounded strategy to achieve its goal of becoming the premier global private bank; Credit Suisse remains committed to the integrated banking model; Credit Suisse private banking has weathered the global storm comparatively well,and the bank remains committed to its growth; Morgan Stanley's wealth management service has achieved better results than the rest of the bank,but not without cost; Morgan Stanley Global Wealth Management Group reported flat profits; Morgan Stanley is focusing on growing wealth management; Bank of America: gearing up for the big swallow of Merrill Lynch; BofA has yet to show its hand for the combined wealth management business; There are real concerns about the risk of culture clashes as a result of the combination; Citigroup has performed well in the good times,but is being tested at the moment; Citigroup had a number of good years leading up to 2008; Citigroup has been growing a global empire; Citigroup Global Wealth Management was tested by market conditions during 2008; The year has seen the departure of the head of Citigroup's Global Wealth Management; Being part of Citigroup has been a good and bad thing for Global Wealth Management; STRATEGIC OPPORTUNITIES FOR WEALTH MANAGERS IN CHALLENGING TIMES; There are several ways for wealth managers to profit in this new environment; Customer retention is of critical importance to wealth managers in a downturn; Wealth managers need to offer an improved quality of service to their existing clientele; Wealth managers need to work to lift the brand,image and reputation of the firm for its existing customers; Increasing share of wallet opportunities will enhance the institution's market position in a downturn and therefore strengthen its position for recovery; Leverage CRM systems to identify opportunities for cross-selling products; 'Accentuate the positive,eliminate the negative': wealth managers should assist clients to prepare for the eventual recovery; Customer acquisition opportunities in a downturn need to revolve around boosting the company profile; Actively recruit good relationship managers from competitors; Leverage CRM systems to identify new wealth management clients; The media can be used to raise the public profiles of both individuals and the financial institution
APPENDIX: Definitions; Definitions; Bank of America; Citigroup; Credit Suisse Private Banking; HSBC Private Banking Holdings; Morgan Stanley Private Wealth Management; Smith Barney Private Client Group; UBS Wealth Management; Methodology; Further reading; Bibliography; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: UBS leads the super league as a global enterprise in terms of AUM,2005-08e; Table 2: Assets under management growth and current size for top ten wealth managers,ranked by level of AUM; Table 3: Cost-income ratios of wealth management firms,2005-08e; Table 4: Operating expenses for the five biggest global wealth managers by AUM,2005-08e; Table 5: Operating revenues for the five biggest global wealth managers by AUM,2003-08e; Table 6: Profit before tax for wealth management firms,2005-08e; Table 7: AUM per client relationship manager ($ million per RM),2007; Table 8: Revenue and profit per client relationship manager ($ million per RM),2007; Table 9: Net inflows per client relationship manager,($ million per RM),2007; Table 10: Citigroup has enjoyed strong growth internationally,albeit from a small base; Table 11: Citigroup Global Wealth Management has been tested recently; Table 12: Percentage of wealth managers citing various key influences on successful client retention; Table 13: Percentage of wealth managers citing various key influences on clients' selection of providers; Table 14: Percentage of wealth managers citing various key influences on increasing clients' share of wallet; Table 15: Percentage of wealth managers citing following key staff as one of the major reasons for clients leaving a wealth management service
List of Figures: Figure 1: UBS had the greatest AUM and one of the largest falls in absolute growth over 2008,while HSBC stands out as having the highest growth between 2005 and 2008,compounded annually; Figure 2: UBS leads the super league as a global enterprise in terms of AUM,2008e; Figure 3: UBS had the greatest AUM and one of the largest estimated falls in absolute growth over 2008,while HSBC stands out as having the highest estimated growth between 2005-08,compounded annually; Figure 4: HSBC promotes the comprehensiveness of its range of services to wealthy clients; Figure 5: UBS's estimated cost-income ratio for 2008 was over 100% in its US operation; Figure 6: Operating expenses for the five biggest global wealth managers by AUM,2005-08e; Figure 7: Operating revenues for the five biggest global wealth managers by AUM,2003-08e; Figure 8: 2008 brought strong reversals in profit before tax for wealth management firms; Figure 9: Credit Suisse has the most AUM per client relationship manager ($ million per RM),2007; Figure 10: Credit Suisse has the highest revenue and profit per client relationship manager ($ million per RM),2007; Figure 11: UBS RMs had the highest new wealth management business productivity in 2007; Figure 12: Credit Suisse's strategy addresses the key value drivers in the wealth management business; Figure 13: Credit Suisse has been active around the world; Figure 14: Asia is now a material contributor to Citigroup's Global Wealth Management; Figure 15: Key drivers of successful customer retention according to European and APAC wealth managers; Figure 16: Key influences on clients' selection of providers according to European and APAC wealth managers; Figure 17: Key influences on increasing share of wallet according to European and APAC wealth managers; Figure 18: Wealth managers citing Following key staff to other organizations as one of the most likely reasons for clients to leave a wealth management service

Wealth management super league 2008

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