All articles by PBI Editorial
PBI Editorial
The changing balance of power
Players like Julius Baer have a once in a lifetime opportunity to gain share from the large integrated banking groups that have suffered from the credit turmoil, according to new Morgan Stanley analysis.UBS, one of the banks most hurt by subprime write-offs, is heading for two years in the doldrums as it tries to recover from its US mortgage exposures, a research note by analysts Huw van Steenis and Bruce Hamilton forecast.A separate investor note by JPMorgan Chase suggested that UBS clients may have withdrawn as much as a net CHF41 billion ($40.2 billion) in the second quarter of this year following record losses from subprime contagion.UBS, giving an update on its second-quarter earnings, has just reported that in the period net new money was negative
The great client disconnect
Amid the boom years for most of the new millennium, many wealth managers have grown complacent and often neglected the client with tactics like product pushing Now forces are aligning that could test the resilience of their business models and profitability. The emerging pressures starting to stress the wealth industry include a decline in asset prices, crises of confidence, operational limitations that restrict growth and service delivery, escalating costs and suppressed client profitability All of these have the potential to drag down margins, according to new research from Deloitte. Worryingly, its feedback from ultra-wealthy private clients point to another major industry challenge a significant portion of the client base is disconnected from, and lacks trust in, wealth management institutions
The private banking quality test
Deutsche Banks Private Wealth Management operation falls within the latter category, its top man in Germany, Joachim Hger, contends.Deutsche Banks Private Wealth Management (PWM) operation in Germany, managing about E52 billion ($81 billion) in assets for more than 5,000 families, selected institutional clients and intermediaries, ranks as the countrys largest private bank.Within PWM, theres growing confidence that, as its rivals try to prevent subprime damage in investment banking and proprietary trading infecting the private banking side, it is well equipped to win significant market share.Deutsche Banks brand and reputation is an incredible USP unique selling proposition when it comes to serving private clients, says Joachim Hger, head of PWM Germany
Commonwealth orphan finds a home
Over at rival ANZ, the approach is to build an Asian wealth empire. Edward Tait, a former banker from investment banking force Macquarie, headhunted 12 months ago by the Commonwealth Bank of Australia (CBA) as executive general manager of the Private Client Services group, says that the banks new private banking model is working well, delivering impressive growth rates. The reason for the rapid success, says Tait, is the way the new model has been formulated.
Art for wealth’s sake
While the slowing US economy has shown signs of undermining the market for multimillion dollar paintings and sculptures of late, the art market will continue to provide one of the alternative investments with the greatest upside for the foreseeable future, art advisors assert.Recent news from the art world has been somewhat troubling, giving rise to predictions that the boom may be drawing to a close
Subscribe to our Newsletter
Get industry leading news, data and analysis delivered to your inbox
Merrill Lynch scoops up the ultimate prize
Merrill Merrill Lynch, which has been aggressively building its global wealth management capabilities, has won the award for The Outstanding Global Private Bank for 2007 at Private Banker Internationals annual tributes to the wealth industry, beating finalists Credit Suisse and HSBC.Announcing its awards, PBI declared that Merrill Lynch has embarked on a broad and purposeful strategy to be a major player in all the key wealth markets The group has $1.6 trillion in assets under management ranking with UBS as the worlds biggest private client manager.The awards, based on a poll of PBI readers worldwide and final selection by an independent panel of judges, were announced at PBIs Annual Wealth Summit, held in Singapore on 17-18 September (see And the winners are…).Top private bankerHans de Gier, chief executive officer of Julius Baer, won the award for The Outstanding Global Private Banking Leader.Under Hans de Gier, the new Baer is one of the assured success stories in private banking of recent years, the PBI judges decided
Find the mother lode
But these pools of mass affluent clients probably represent the biggest single source of new, profitable customers for the big universal banks, a new study from VRL KnowledgeBank suggests.The segmentation of mass affluent clients differs widely among various banks, but a typical definition is those in the bracket of between $100,000 and $1 million of investable wealth.Yet in practice, for most banks this is only a very rough rule of thumb perhaps inevitably in a complex real world where behaviour and other variables are often more relevant
Standard Life to debut in wealth market
It will tailor individual portfolios using goals-based absolute return strategies which the firm says will provide a more accurate analysis of client requirements.The venture will impose a fee of 1.375 percent of assets under management, described by rival private banks as expensive, particularly given that Standard Life will have to break into a new wealth sector at a time of the worst financial market volatility in years.However, it is understood that this reflects the need for Standard Life to reward intermediaries, such as independent financial advisers (IFAs), for securing clients for its new service
EFG revs up the M&A machine
EFG International, which has made acquisitions a core part of its model to add client assets, announced three acquisitions at the year-end, adding to a deal to buy Marble Bar, a London-based alternative asset manager in early December.It also disclosed an improved performance in attracting new client money in the fourth quarter of 2007, after a dismal performance in the third quarter
The benchmarks for the wealth industry
In the unprecedented turbulence, the PBI judging panel has a really hard job this year to pick the winners. This year more institutions than ever before have entered for the PBI annual awards, a testimony to the growing popularity of these accolades among the global wealth industry. More than 40 outstanding wealth institutions and individuals have made it to the awards short-list, a record number. The winners in each category, assessed for their role as benchmark best-practice firms for the private banking industry, will be announced at an awards dinner to be held at the St Regis Hotel, Singapore on November 6, during the PBI Annual Wealth Summit.