Bcg Global Wealth Report 2014 Pdf

Finding the Optimal Business Model Wealth managers globally embrace a host of different business models in pursuit of profitable growth. Wealth managers globally embrace a host of different business models in pursuit of profitable growth. Global wealth reflects total financial assets across all households.

The traditional notion of a commission-driven, transaction-oriented, sole broker still exists. Such prioritization helps players forge highly customized investment strategies, tailored products, and deeper overall expertise for key markets, while maintaining a standardized approach for others. Below-average growth was observed in the larger countries in the region.

Wealth booked from the old world will continue to decline. Some of the larger players are retooling their offerings while smaller players are generating growth with low-cost models or niche propositions. Unless stated otherwise, wealth figures and percentage changes are based on local totals that were converted to U. The fastest-growing are the larger ones, which are putting together an independent proposition with sophisticated product and technology offerings. Indeed, the latest tensions between Russia and Ukraine, as well as the escalated conflict in Syria, have highlighted the need for domiciles that offer high levels of political and economic stability.

For countries without such data, we developed estimates on the basis of wealth distribution patterns of countries with similar income distributions Gini coefficients compiled by the World Bank. Most offshore private banks today serve clients in more than markets. In addition, recent disappointing local stock-market returns combined with a weaker currency represent a call to action for domestic players. But the road will not be easy.

There are roughly ten offshore incumbents, some with plans to launch an onshore offering. Nonetheless, players that have decided to leave selected markets have not always obtained the results they hoped for. Choose your location to get a site experience tailored for you.

Bcg global wealth report 2014 pdf


Positive factors included an improving job market in the U. They typically offer light levels of advisory and financial planning over the phone, with some branch-based consultation.

Global Wealth 2014 Riding a Wave of Growth

Mexico is also a fast-growing and attractive wealth-management market. Latin America Latin America has continued to show appreciable growth in private wealth. We then distributed total wealth within each country by household not by individuals or adults on the basis of a proprietary Lorenz curve methodology. Finally, we calculated market movements as the weighted-average capital performance of asset classes held by households in each country, factoring in domestic, regional, html to pdf open source and international holdings.

Excellent growth did not always translate into higher profits. This initiative may have hindered overall AuM growth but will lead in time to higher overall profitability.

Their focus has been more on banking, overall asset allocation, and intergenerational wealth transfer. Family offices are key in this segment and have developed increasingly sophisticated capabilities.

We have observed a renewed effort by a number of retail banks using this model to increase their share of wallet among mass affluent customers. In addition, private wealth is now flowing to second- and third-generation families and individuals.

Which of these business models will emerge as the most promising is still up for debate. Their revenue model is fee-based, in line with their fiduciary standards.

New focus has been placed on fee-based billing arrangements as well as on discretionary client mandates. Further, despite major efforts to broaden and deepen customer relationships, the primary client link is with the advisor, not the firm. Some of these firms have managed to bring a number of successful, high-end brokerage advisors into their fold. First, virtually all international players have been vying for a slice of the wealth managed in offshore centers such as Singapore and Hong Kong, where competition is particularly intense. Reacting to these developments, private banks have started to revisit their international wealth-management portfolios.

Further, wealth managers in the Asia-Pacific region have developed better collaboration models with adjacent businesses such as capital markets, investment banking, and commercial banking. Of course, all European offshore centers share some common challenges. When such data could not be obtained, we assumed that countries with similar cultures and regulatory environments would have similar asset-holding patterns. In addition, the development of seamless, fully integrated multichannel capabilities needs a higher priority.

Healthy returns in local markets and greater economic stability are positive forces, favoring the development of onshore offerings. Asia-Pacific excluding Japan. The private-banking model, while small in the U. We used available national statistics to identify different asset-holding patterns for the individual wealth segments in each country. All other markets and client segments should be limited to standard offerings.

Bcg global wealth report 2014 pdf

Competition is more intense. Overall, the credo should be to do just a few things, but do them well. The Asia-Pacific region and its new wealth will account for about half of the total growth. See the accompanying exhibit. Such assets can typically be monetized easily.

And sophisticated digital offerings are increasingly becoming a source of competitive advantage. Of course, every market has its own nuances, and a strategy that succeeds in one country may miss the mark in another.

Bcg global wealth report 2014 pdf

They also put great emphasis on establishing both deep client relationships and a strong presence in local communities. Some players have started to develop buy-side, open-architecture offerings.

The majority of this growth will come from existing assets rather than from new wealth. Yet there are areas that still need attention for many players. As for which model ultimately will be the biggest winner, the jury is still out. Nonetheless, the economics for wealth managers have been challenging for several reasons.

Market Sizing A Robust Year

Players in every region will be required to forge creative strategies in order to deepen client relationships and lift both revenues and profits. In a word, the complexity of the industry has become a major issue.