Shifts in the UK Wealth Management Landscape

Table of Contents

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 2008
• 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) 2009
• Wealth Management Market Leaders Survey 2009
• Bibliography
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

List of Tables

• Table 1: AUM within UK wealth managers in 2007 and 2008
• Table 2: Changes in AUM and total clients in 2008
• 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 providersTable 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