Global assets under management (AuM) rebounded
almost 12% to $112trn in 2009, with Asia-Pacific the fastest rising
region.
According to Boston Consulting Group’s (BCG)
latest Global Wealth report, Regaining Lost Ground: Resurgent
Markets and New Opportunities, client trust and wealth manager
performance remained lower than before the global financial
crisis.
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The research confirmed there had been
significant client asset flows between private banks but said
competition for net new money inflows was wide open as clients had
not established strong links to their new banks. BCG estimated 50%
of shifted assets expected to move again between banks.
The study also said private banks and wealth
managers had to improve their risk management, particularly around
operational and reputational risk.
BCG’s survey of 114 wealth management
institutions worldwide found that although AuM increased by an
average of 14% in 2009, their revenues declined by more than 7% on
average, while their average return on assets fell by 12 basis
points to 83 basis points.
These drops were driven by a drop in
transactions, tougher price negotiations and a migration of assets
to lower-margin products, the report said.
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By GlobalDataThe BCG study found Asia-Pacific’s wealth
(excluding Japan) increased 22% to $17.1trn.
“We expect Asia-Pacific, excluding Japan, to
grow at nearly twice the global rate, raising its share of global
wealth from 15% in 2009 to almost 20% in 2014,” said BCG partner
Tjun Tang.
BCG projected global wealth to grow at an
average annual rate of nearly 6% from year-end 2009 through to
2014.
Singapore saw the highest growth in
millionaire households, up 35%, followed by 33% for Malaysia, 32%
for Slovakia, and 31% for China.
The markets with the highest densities of
millionaires are Singapore, Hong Kong, Switzerland, and the Middle
East.
Offshore banking centres are on notice to
adjust their operating models in response to increasing
transparency demands.
The wealth report predicted, however, that the
share of global wealth held offshore would fall from close to 7% in
2009 to just over 6% in 2014.
“The push for transparency will compel some clients—particularly
those in North America and Europe—to move their assets. More
important, it will force private banks to adjust their strategies
and operating models, and perhaps even to abandon certain markets,”
said Peter Damisch, a BCG partner and a coauthor of the report.
