US High Net Worths 2006

Table of Contents

• CHAPTER 1 EXECUTIVE SUMMARY
  • Market context
  • Competitive Dynamics
  • The Future Decoded
• CHAPTER 2 INTRODUCTION
  • What is this report about?
  • Who is the target reader?
  • How to use this report
• CHAPTER 3 MARKET CONTEXT
  • Introduction
  • Key findings
  • Just over 20% of the U.S. population is classed as a mass affluent or high net worth investor
  • There were 14 million HNW individuals in the US in 2005
  • HNW individuals in the US controlled USD12,717bn in liquid onshore assets in 2005
  • The US high net worth market now exceeds the levels attained before the market downturn of 2001
  • The number of high net worth individuals in the US has grown by 18% between 2001 and 2005
  • The assets held by US high net worths have grown by 23.2% between 2001 and 2005
  • Regional income distribution in the US varies significantly
  • New Hampshire, New Jersey & Maryland are the richest U.S. states
  • Data tables
• CHAPTER 4 COMPETITIVE DYNAMICS
  • Introduction
  • Key findings
  • There are few key competitors in the US HNW market
  • Smaller competitors have developed a number of strategies to differentiate themselves
  • Competitor Profile: Citigroup Private Bank
  • Citigroup Private Bank is the first company to bring banking, insurance & investment services to U.S. clients under one umbrella
  • Competitor Profile: UBS Wealth Management
  • UBS positions itself as the world's leading wealth management firm
  • Competitor Profile: Merrill Lynch
  • Merrill Lynch has client assets totaling USD1.8tn
  • Competitor Profile: JP Morgan
  • JP Morgan is one of the leading financial services firms in the world, with offices in more than 50 countries
  • Market Issues
  • Regulation had a high impact on competitors in the US HNW market in 2005
  • Rule 202 a burden on some banks in the U.S. high net worth market
  • Sarbanes-Oxley Act has placed considerable strain on regulatory compliance and resources in the U.S. high net worth market
  • The Patriot Act has added to the regulatory strain placed on U.S. wealth management firms
  • Mergers, acquisitions and consolidation activity was low in 2005
  • Structured products were popular among US HNW clients in 2005, although the way a firm approaches these products is vital to their success
  • Tax reductions have stimulated investment market participation
  • Acquiring and retaining quality staff continued to be an issue for many competitors
  • There has been more of a focus on client service rather than product innovation in the U.S. high net worth market
  • Lack of scalability is preventing banks from reaching the very richest clients
  • 70% of high net worth households in the U.S. are looking at alternative assets such as hedge funds
• CHAPTER 5 THE FUTURE DECODED
  • Introduction
  • Key findings
  • The number of HNW individuals in the US is set to increase by roughly 34% by 2010
  • Assets held by US HNWs will grow to USD19.2bn over the next five years
  • Giving investors access to global investments will affect the market most over the short term
  • Investors may begin to shift to the bigger weath management firms
  • World Wealth Report shows that investors are looking to amplify their global holdings
  • U.S. high net worths on average, allocate more than three quarters of their portfolios to domestic holdings
  • Firms will increasingly have to provide a comprehensive wealth management service
  • US wealth management firms anticipate increasing strength of internet-based and independent firms over the coming year
  • The U.S. high net worth industry will see increased consolidation over the next few years
  • U.S. private banking market expected to be hugely profitable over the next decade
  • Leveraging links with communities, marketing to new sectors and building a network of experts identified as key challenges for the U.S. wealth market
  • The "Baby Boomer" population is expected to be a rich source of future revenue for U.S. wealth management firms
  • Data tables
• APPENDIX
  • Definitions
  • CAGR
  • Mass Affluent
  • High net worth (HNW)
  • Liquid assets
  • Liquid asset bands
  • Research methodology
  • Further Reading
  • Global Wealth Management SPP
  • Interactive Databases
  • Market Reports
  • Strategic Insight Reports
  • Wealth Management Competitor Tracker
  • Datamonitor Asia Pacific Wealth Management SPP
  • Datamonitor's Global Wealth Model
  • The UK sub model
  • Forecasting methodology
  • SPP writing team
  • List of Tables
    • Table 1: US: Number of mass affluent and high net worth individuals, segmented by asset band, USD, 2001 - 2005
    • Table 2: US: value of aggregate liquid wealth, segmented by asset band, USD, 2001-2005
    • Table 3: US: value of aggregate liquid wealth, segmented by asset band, USD, 2001-2005
    • Table 4: Three-year average median household income by state, 2002-2004
    • Table 5: US: Forecast number of mass affluent and high net worth individuals, segmented by asset band, USD, 2006 - 2010
    • Table 6: US: forecast value of aggregate liquid wealth, segmented by asset band, USD, 2006-2010
  • List of Figures
    • Figure 1: The highest levels of liquid wealth among high net worth individuals are to be found in the highest and lowest asset bands
    • Figure 2: The number of U.S. high net worth individuals is expected to grow by nearly 50% over the next five years
    • Figure 3: Over half of American high net worth individuals have between USD300-500k in liquid assets
    • Figure 4: The highest levels of liquid wealth among high net worth individuals are to be found in the highest and lowest asset bands
    • Figure 5: The vast majority of U.S. high net worth individuals have held liquid wealth in the lowest two asset bands since 2001
    • Figure 6: U.S. high net worth individuals have in general held the most liquid wealth in the highest and lowest asset bands since 2001
    • Figure 7: Households in New Hampshire, New Jersey and Maryland have the highest median income averaged over three years, 2002-2004
    • Figure 8: The number of U.S. high net worth individuals is expected to grow by nearly 50% over the next five years
    • Figure 9: Liquid assets held by high net worth individuals in the U.S. is expected to grow by nearly 50% over the next five years