Wealth Management in Brazil 2009

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

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
  • Wealth management client characteristics

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

• 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

• Bibliography
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Financial assets of Brazilian retail investors
• Table: Value of onshore liquid assets in Brazil in dollar bands ($bn)
• Table: Forecast value of onshore liquid assets in Brazil in dollar bands ($bn)
• Table: Number of individuals in Brazil in dollar bands (000s)
• Table: Forecast number of individuals in Brazil in dollar bands (000s)
• Table: Wealth Management Opportunity Index - Brazil
• Table: Wealth Management Opportunity Index with values - Brazil
• Table: Global ranking of assets under management (October 2008)
• Table: Distribution by fund type (October 2008)
• Table: Types of assets managed by the largest asset managers in Brazil
• Table: Brazil' s banks by nature, ownership and size (March 2009)

FIGURES

• Figure: Growth in average nominal wages has occurred in a low inflationary environment
• Figure: The stock markets of the BRIC countries have bounced back strongly in 2009
• Figure: Interest rates have fallen sharply over the past few years, but do offer good returns relative to inflation
• Figure: The 2008 fall in the stock market had serious consequences for the wealth of Brazilians
• Figure: The relative proportion of equities held by Brazilian investors ballooned in 2007 and popped in 2008
• Figure: Brazilians have embraced a number of different fund types
• Figure: The Brazilian Real has strengthened against the US dollar of late
• Figure: A number of factors point towards the likely movement of money back onshore