Wealth Management in Brazil 2009

Published by: Datamonitor

Published: Aug. 21, 2009 - 15 Pages

Table of Contents

Overview

Catalyst

Summary

Methodology

Executive Summary

2008 was a very painful year for Brazil's investors, although the good times will resume from 2009 onwards

HNWs are still risk loving, but they are becoming more sophisticated and demanding

The wealth management market in Brazil is well-developed and competitive

International wealth managers need to treat this market cautiously and think hard about their differentiators

Table of Contents

Table of tables

Brazil's Wealth

Brazil's economy proved resilient right up to 2009 and should return to its high-growth ways in the coming years

Brazil's stock market was not as badly affected as other BRIC countries in 2008, and has come back strongly in 2009

Relatively high interest rates have bolstered Brazilians' wealth

The importance of equity in Brazilians' portfolios has grown rapidly over the past few years

In 2007, Brazilian investors had more onshore liquid assets in equities than in deposits

2008 marked a painful year of losses for Brazil's wealthy, but 2009 will put them well on the road to recovery

The number of affluents in the country fell by 55% last year due to the sharp fall in the financial markets

Brazil's Wealth Management Market

It is becoming increasingly difficult for international wealth managers to enter and succeed in Brazil's wealth management market

The Wealth Management Opportunity Index

Wealth management market features

Range of products and services: -2

Level of consolidation: -2

Ease of market entry: -3

Level of international wealth management activity in the country: -2

Wealth management client characteristics

Level of use of onshore services: 2

Level of demand for high-quality service: 2

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: Financial assets of Brazilian retail investors

Table 2: Value of onshore liquid assets in Brazil in dollar bands ($bn)

Table 3: Forecast value of onshore liquid assets in Brazil in dollar bands ($bn)

Table 4: Number of individuals in Brazil in dollar bands (000s)

Table 5: Forecast number of individuals in Brazil in dollar bands (000s)

Table 6: Wealth Management Opportunity Index - Brazil

Table 7: Wealth Management Opportunity Index with values - Brazil

Table 8: Global ranking of assets under management (October 2008)

Table 9: Distribution by fund type (October 2008)

Table 10: Types of assets managed by the largest asset managers in Brazil

Table 11: Brazil's banks by nature, ownership and size (March 2009)

List of Figures

Figure 1: Growth in average nominal wages has occurred in a low inflationary environment

Figure 2: The stock markets of the BRIC countries have bounced back strongly in 2009

Figure 3: Interest rates have fallen sharply over the past few years, but do offer good returns relative to inflation

Figure 4: The 2008 fall in the stock market had serious consequences for the wealth of Brazilians

Figure 5: The relative proportion of equities held by Brazilian investors ballooned in 2007 and popped in 2008

Figure 6: Brazilians have embraced a number of different fund types

Figure 7: The Brazilian Real has strengthened against the US dollar of late

Figure 8: A number of factors point towards the likely movement of money back onshore

Abstract

• Sizes, segments and forecasts the number of affluent invididuals across 10 liquid asset bands from USD50k
• 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

• Understand Brazilian HNWs' attitudes and investment behaviour, and reasons for choosing/leaving their wealth service.
• Gain insight into the competitive characteristics of the Brazil wealth management market, and learn the factors for success.
• See how the Brazil wealth management market scores against Datamonitor's Opportunity Index.

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