All articles by PBI Editorial
PBI Editorial
JV hit by big Citi wealth outflows
The largest global wealth management force ranked by financial adviser headcount and a top three player by client assets is being formed under the new joint venture announced by Morgan Stanley and Citigroup. Morgan Stanley is moving its high-end wealth management operations at home and abroad, including Banque Morgan Stanley in Switzerland, into the venture, to be called Morgan Stanley Smith Barney
Geneva banks big losers in $50bn scandal
Private banking reputations in the US and across Europe have been damaged by the alleged $50 billion Ponzi swindle by US financier Bernard Madoff Private banks in Geneva, which have routed billions of dollars of client assets into hedge funds in recent years, are centrally involved in the alleged $50 billion Ponzi scheme fraud by US financier Bernard Madoff.
The rich early arrivers
A new attempt is being made to segment the wealthy by a range of predictors into groups that include the up-and-comers, early arrivers, millionaires next door and the established wealthy.The initiative, by Phoenix Wealth Management, breaks down the wealth management market into four distinct segments by age and net worth major predictors of needs, concerns and behaviour
The lost decade for investments
Where do poor investors go next, as they shelter their devastated portfolios in safe havens like cash, government bonds and gold?Investment managers face a long haul in tempting investors back into equities, and away from the safe-haven positions built up in cash and government securities in recent months.US dollar and sterling-based private client investors experienced a disastrous third quarter, according to Asset Risk Consultants (ARC), a Guernsey-based research and consultancy based firm that produces a series of widely-followed Private Client Indices (PCI).All these indices, which reflect actual portfolio performance at firms that collaborate with ARC in the production of the indices, recorded big falls during the quarter.The ARC US Dollar Cautious PCI, which has a target relative risk of between 0 and 40 percent of world equity markets, fell by the 4.8 percent during the quarter.The ARC US Dollar Balanced Asset (target relative risk 40 percent to 60 percent of world equity markets), Steady Growth (target relative risk 60 percent to 80 percent of world equity markets) and Equity Risk (target relative risk of 80 percent to 110 percent of world equity markets) PCIs fell by 7.9 percent, 10.4 percent and 13.0 percent respectively.Sterling-based investors fared slightly better during the quarter
Going into recession in good shape
This is still not keeping pace with the level of personal wealth creation in Britain, at least in the pre-credit crunch period.Investment assets controlled by wealth managers in the UK grew to £402 billion ($747 billion) by the end of 2007, up by 10 percent on the previous year, as buoyant first and second-quarter performance offset the dismal last half of the year as the credit crisis disrupted markets.The wealth industry, ranging from private banks to execution only brokers, generated revenues of £3.9 billion, up 16 percent, and pre-tax profits of £1 billion, up a healthy 28 percent, according to new analysis by wealth benchmarkers Compeer.Asset growth was helped by new business levels, accounting for 6.5 percent of asset growth compared to 3.5 percent of underlying performance growth among wealth managers
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Foreign players make little headway
The rapid consolidation process in Italian financial services, which has produced two Italian banking champions in the shape of UniCredit and Intesa Sanpaolo, has also helped domestic players to increase their lead over foreign rivals in the countrys private banking market.A new survey by the Bologna-based consultancy Studio Magstat shows an expanding wealth management market in Italy could develop more quickly if the untapped potential of assets held by regional banks can be captured.Big bank mergers and acquisitions have revolutionised the banking sector and have had a knock-on effect on private banking too, Marci Mazzoni, chairman of Magstat Consulting says There has been an increasing concentration of assets among the biggest domestic banks as a result.According to Magstat, Italys private banking market grew by 9.9 percent in 2006 to a total of 532 billion ($734 billion) of assets.Four powerful groups have emerged from the banking consolidation process, which is reflected in enhanced private banking rankings
Race for share of booming CEE market
Wealth management firms in Central and Eastern Europe (CEE) are beginning to redefine their offerings in an attempt to exploit the booming levels of wealth creation seen in Poland, the Czech Republic and Hungary over the past few years. The CEE market, characterised by a mix of mass affluent and full-scale private banking offerings, is also witnessing renewed interest from mid-tier universal banks such as KBC, UniCredit and Erste, particularly in Poland.
Chinese private banking gaining currency
Unsurprisingly, private banks both domestic and foreign are ramping up their efforts to gain a foothold in the region. The big boys have long had operations in China in preparation for an easing of regulatory pressure, and are now applying for renminbi-denominated licences in order to better attract Chinese clients. Deutsche Bank (China) began operation on 2 January following approval from the China Banking Regulatory Commission (CBRC) to incorporate in Beijing and will now offer renminbi-denominated products and services across its branches in Beijing, Shanghai and Guangzhou.
Wall Street heavyweights back wealth venture
Fieldpoint Private Bank & Trust is receiving extensive backing from former Merrill Lynch executives, as well as other senior figures in banking and business.A motivation for the new venture is understood to be to tap into the dissatisfaction among the super-rich, many of whom have worked on Wall Street, with the level of service from existing private banks as well as product-pushing trends in the wealth industry.Fieldpoints president and CEO, Kevin McCabe, said: I would describe our firm as providing the focus and expertise of a private bank, the personalisation and membership feel of a family office and the local access and responsiveness of a community bank.David Komansky, William Schreyer and Dan Tully, three former Merrill Lynch chief executives, have agreed to back the bank, which promises an extraordinary level of personalised service to clients
Hedge fund fees on the slide
A potential shakeout appears to favour the major hedge fund managers and those with a proven record of performance.New hedge funds are being set up at the slowest pace since 2003, with almost all of the $164 billion of new investments going to managers with proven records, according to Hedge Fund Research, an industry tracker based in Chicago