Table of Contents
- 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
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