The wealth management industry has increased its asset under management (AUM) 8.7% from 2011 with a surge in net new money (NNM), the new Scorpio Partnership’s Private Banking Benchmark 2013 suggests.
According to Scorpio’s study, the wealth management industry now manages a total of $18.5 trillion, up from $16.7 trillion in the previous year.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataBy contrast, the latest report from Boston Consulting Group (BCG) reported a 13% rise in AUM global growth, however details on the actual amount of assets were not disclosed by BCG.
‘Mega-wealth managers’
Among 209 global wealth management players, the review found the top 20 operators experienced close to 11% growth in their AUM from 2011 gaining the status of what it termed ‘mega-wealth managers’.
These operators are currently managing 76% of the total industry AUM. The AUM growth compares to 8.7% across the industry as a whole.
The reason for this growth was mostly due to their strong investment management performance as well as the NNM inflows.
On average firms posted a percentage change in net new money of 23.7% over the annual review period, from a -27.9% fall in new money in 2011.
At the top of this year’s review is UBS with its robust AUM growth of 9.7% with $ 1,705bn, surpassing Bank of America whose AUM growth stood at 5.9% with $ 1,673bn. Another significant growth was Spain’s Santander who returned into the top 20 with a significant 66.2% jump after it absorbed Banesto and Banif private banks.
Signs of weakness
Despite these positive results, Scorpio’s data showed that there are still some areas which required attention, in particular maintaining profit margins.
Pre-tax profits were solid across the industry, but the average percentage change on profits was 5.3% for 2012, compared to 12.3% for 2011.
The wealth management industry also needs to optimise operating costs as they continue to grow, Scorpio said.
New clients’ demands
According to the review, the dominance of the global top 20 reflects the consumer demand for a single wealth management proposition rather than multiple providers.
Of 4,400 millionaires worldwide surveyed, 41.4% of them preferred working with a single wealth manager, compared to just 14.4% who prefer multiple advisers.
It was unclear if this was also the case amongst the ultra high net worth who are typically multi-banked.
A new focus on emerging markets
Scorpio’s study also examined the regional break down of AUM at leading firms.
A selected group of firms collectively managing $1.1tn of AUM has 28% of booked assets in Latin America, 21% in the Asia Pacific markets and 2% in the Middle East and Africa.
Assets currently booked in the emerging markets now accounts for 51% of total assets.
Scorpio said the findings indicated international private banks had achieved some success in re-evaluating their proposition and attracting assets from developing markets.
