Table of Contents
OVERVIEW
- Catalyst
- Summary
- Methodology
EXECUTIVE SUMMARY
- RBS' s wealth management service appears to be ripe for plundering
- After many years of prosperity, Britons have fallen on hard times
- HNWs are mostly defensive, but there are important differences in their
attitudes that wealth managers need to cater for
- Wealth managers need to consider the overlooked area of advisory services
and step up the frequency of their client contact
SPECIAL FEATURE: RBS' S VULNERABLE WEALTH MANAGEMENT SERVICE
- RBS' s wealth management service is looking weak on a number of fronts and
competitors would do well to exploit this
- RBS has a significant wealth management operation in the UK
- RBS has undergone a dramatic slide and has needed to be bailed out by
the UK government
- RBS' s wealth management operations are being affected by these changes
- RBS' s brand and perception of financial stability have taken a knock,
putting even more of an emphasis on service quality
- RBS' s wealth management offering is rated by its peers as slightly above
average, but is nothing special
- RBS has been relatively successful at keeping clients from defecting,
but not at keeping relationship managers from defecting
- There are plenty of weaknesses that RBS needs to address and that
competitors should be exploiting
- Key implications for RBS: concentrate on clients and relationship
managers
- Key implications for RBS' s competitors: it is open season on RBS' s
clients and relationship managers
THE UK' S WEALTH
- The years of heady growth and prosperity have come to a dramatic end in
Britain
- Redundancies, pay freezes and reduced bonuses have become the order of
the day
- For business owners it has become much more difficult to generate wealth
- Property prices in the UK have undergone sharp falls
- The stock market has been the centre of much selling activity
- UK investors continue to play it safe with their wealth
- Deposits have attracted a lot of money of late
- Wealth data in 2009
THE UK HIGH NET WORTH INVESTOR
- UK HNWs have displayed typically defensive behavior but are starting to
return to the riskier asset classes
- UK investors have moved en masse into cash, but they are already moving
money into equities in anticipation of a recovery
- Over the next two years, fixed income, real estate and alternative
investments will become more important in HNWs' portfolios
- The key product winners in two years' time will be closed ended real
estate funds and corporate bonds
- British HNWs may not be particularly knowledgeable on investments but they
are demanding when it comes to service
- HNWs exhibit lower than average knowledge of products and market
conditions
- UK HNWs are demanding when it comes to their wealth management service
- The current market declines have impacted on different clients in
different ways
- Clients' investment demands are changing but not in a uniform way
THE UK WEALTH MANAGER' S VIEW
- Wealth managers disagree about what HNWs will be demanding in two years'
time but agree about which areas to focus resources on
- Several fundamental products and services will be in demand from HNWs in
the next two years
- There are a few common areas where wealth managers will be focusing
resources in two years' time
- While personal relationships are still key in HNWs' choice of wealth
managers, clients are focusing much more on the financial stability of
providers
- Financial stability is very important to HNWs in Britain
- British wealth managers see personal relationships as their biggest
strengths, and brand, image and reputation as their biggest weaknesses
- Customer contact is important both in terms of increasing share of wallet
and improving client retention
- Increased face to face contact is the key to increasing share of wallet
- Wealth managers that do not make errors will be very successful at
retaining HNWs
- UK wealth managers are not talking to their clients with the same
frequency as their European counterparts
- British clients are being contacted by phone less frequently than in
other countries
- UK wealth managers are the worst in Europe at meeting their clients face
to face
- The performance of their overall portfolio is what HNWs most want to
talk about when they speak to their wealth manager
- UK wealth managers generally feel that competitors owned by nationalized
or part-nationalized banks will become less competitive
- Wealth managers are not particularly positive about the prospects for
nationalized or part-nationalized banks
- Wealth managers believe that nationalized and part-nationalized
providers are not seen as more sound by clients, and will face a number of
problems going forward
APPENDIX
- 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
- Wealth Management Market Leaders Survey 2009
- Global Wealth Model
- Bibliography
- Definitions
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
TABLES
- Table: Wealth managers' view about the strengths and weaknesses of RBS' s
wealth management services
- Table: Wealth managers' view about the strengths and weaknesses of RBS' s
wealth management services
- Table: Wealth managers' view about the strengths and weaknesses of RBS' s
wealth management services
- Table: RBS is looking very vulnerable as a business
- Table: What proportion of your HNWs' portfolios is allocated to the
following five asset classes?
- Table: HNWs' portfolio allocation now versus in 2 years' time
- Table: HNWs' portfolio allocation by product area now, versus in two
years' time
- Table: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat
low, 3 = somewhat high, 4 = very high)
- Table: HNW attributes on a scale of 1 to 4 (1 = very low, 2 = somewhat
low, 3 = somewhat high, 4 = very high)
- Table: What are HNWs demanding today?
- Table: In two years' time, how much demand do you expect from HNWs for the
following product areas?
- Table: What product areas will your wealth management service focus most
resources on in the next two years?
- Table: What will determine HNWs' choice of wealth management service over
the next two years?
- Table: What are your company' s biggest strengths and weaknesses today?
- Table: What is the most effective means of increasing share of wallet
today?
- Table: What is the best way to retain clients today?
- Table: On average, how often do your relationship managers speak by phone
to each HNW client?
- Table: On average, how often do your relationship managers speak in person
to each HNW client?
- Table: When speaking with clients, what do they most want to talk about
today?
- Table: To what extent do you agree with the following? (1 = strongly
disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree)
- Table: To what extent do you agree with the following? (1 = strongly
disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree)
FIGURES
- Figure: The luster has disappeared from RBS' s brand, image and reputation,
but it still offers above average service quality
- Figure: RBS is slightly above average for products, about average in
advisory service and below average for technology
- Figure: RBS is not good at keeping its relationship managers from defecting
- Figure: The labor market has been hit by higher unemployment and lower
average real wages
- Figure: The AIM market illustrates how hard things are for British
entrepreneurs looking to create or realize wealth
- Figure: The British property bubble has popped, and many predict further
falls in value
- Figure: The FTSE has been hit hard, but not as badly as other European
markets
- Figure: Britons have pruned back their holdings in bonds, shares and
mutual funds
- Figure: The majority of HNW wealth in the UK is invested in the ' equities'
asset category, with this accounting for 30% of all investments
- Figure: Investors will return to the out of favor asset classes in the
next two years
- Figure: In 2011, investors will have less of their portfolios in equities
- Figure: HNW investors in the UK have a lower market and product knowledge
than their European counterparts
- Figure: Personal relationships and personal contact are still paramount in
retaining HNWs
- Figure: In the UK, HNW investors' greatest demand is for discretionary
asset management services
- Figure: In two years' time, the greatest demand amongst HNW investors in
the UK will be for discretionary asset management with 25% of HNW investors
demanding this category of product
- Figure: Wealth managers in the UK will be focusing most of their resources
on discretionary asset management in two years' time
- Figure: HNW investors in the UK are most influenced by personal
relationships with clients in their choice of wealth manager
- Figure: The greatest strength of wealth managers in the UK is their
personal relationships with clients
- Figure: The best way for wealth managers in the UK to increase share of
wallet is by increasing face to face contact
- Figure: The best way for wealth managers in the UK to retain HNW investors
is to make no/less errors
- Figure: In the UK, wealth management relationship managers speak to
clients by phone approximately once a month
- Figure: Wealth management relationship managers speak in person to clients
approximately once each half year
- Figure: The majority of clients in the UK want to speak to their wealth
manager about the performance of their overall portfolio
- Figure: Wealth managers in the UK think that boutique wealth managers will
have the best opportunities in the next few years
- Figure: Nationalization and part-nationalization has lead to negative
perceptions of wealth managers
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