2012: Trends to Watch in Global Wealth Management
NEW YORK, April 26, 2012 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:
2012: Trends to Watch in Global Wealth Management
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Datamonitor's 2012: Trends to Watch in Global Wealth Management provides in-depth forward-looking analysis of six of the biggest trends in global wealth management as well as a review of the industry in 2011. These trends are accompanied by industry examples and where possible best practice solutions suggesting how to react to the trends.Understand six of the biggest trends in global wealth management through in-depth forward-looking analysis.Assess the global wealth management industry with support from a range of Datamonitor's proprietary databases, reports, and surveys.Identify strategies to remain competitive in the global wealth management industry by comparing best-practice industry examples.The eurozone sovereign debt crisis, natural calamities, and declines in global markets had a heavy impact on the global wealth market in 2011. It was also an active year for regulation and tax developments. Banks continued their efforts to meet Basel III capital requirements, and the US and UK increased efforts to collect tax on undeclared assets.Across the globe indebted governments will continue to focus on the offshore wealth and uncollected tax revenue of their most affluent citizens. However, the political instability that continues to gain momentum in the Arab world – and is threatening to take hold in other countries – will provide a welcome stimulus for offshore banking business.Prevailing economic instability in developed and emerging markets will encourage clients to modify their risk exposure by changing the product mix. Liquidity and capital protection will remain high on the agenda. Capital requirements will continue to encourage larger banking groups to divest capital-intensive product lines such as private equity.What will be the major trends affecting global wealth management in 2012?How will the seven regional wealth markets perform compared to each other?How are wealth managers adapting to an increasingly regulated industry?What is the future for offshore banking?What geographies experienced the most M&A activity, product innovation, and staffing changes in 2011?
OVERVIEW
•Catalyst
•Summary
•Methodology
EXECUTIVE SUMMARY
•2011 was characterized by macroeconomic instability, leading to declines in global wealth
- Regulation and tax posed challenges to the wealth management industry
- Competitive trends were dominated by product innovation and customer targeting in 2011
•Trends to watch in 2012
- Trend one: continuing economic instability will result in a volatile outlook for global wealth management
- Trend two: the global wealth market will still be dominated in broad terms by mature markets, but emerging markets will continue to erode their dominance
- Trend three: offshore banking will continue to falter under regulatory pressure, but will also benefit from political instability
- Trend four: the approach to and the composition of the wealth management product mix will change
- Trend five: the quest for transparency and compliance will continue to encourage pricing and fee management innovation
- Trend six: new channels will transform how wealth managers communicate and conduct business with their clients
INTRODUCTION
•Methodology
2011 IN REVIEW
•2011 was characterized by macroeconomic instability, leading to declines in global wealth
- The eurozone sovereign debt crisis impacted on the global wealth market
- The Australian economy rebounded strongly from floods and cyclones in early 2011
- The Brazilian economy grew less than expected in 2011
- The Chinese economy continued to grow at a high rate, but internal fiscal weaknesses began to appear
- The German economy survived on strong fundamentals in 2011
- The Indian economy was the largest recipient of remittances in the world in 2011
- The UK economy was dragged down by low consumer demand and high unemployment
- The US economy was marred by prevailing volatility but made a slight recovery in Q4 2011
•Regulation and tax
- Tax developments targeted undeclared offshore assets
- Regulation affected the wealth management product mix
- Consumer protection and transparency remained high on the regulatory agenda
•Competitive trends were dominated by product innovation and customer targeting in 2011
- Product innovation and customer targeting played a far bigger role than in previous years
- Market consolidation in developed markets kept acquisition activity alive but muted
- Staffing activity remained high as wealth managers expanded into new markets and competed for the best talent
•Global M&A activity has been restricted by increased due diligence
- September and November were the peak months for M&A activity in 2011
- In 2011 the strongest organic growth was seen in Asia Pacific, while M&A activity was focused on Western Europe
•Product innovation in developed markets was led by regulatory requirements, while innovation in emerging wealth markets highlighted their infancy
- Product innovation was most active in North America and Asia Pacific while customer targeting was most active in Western Europe in 2011
- Customer targeting was most prominent in Western Europe, where sponsorship was used to increase public presence and the focus on key customer segments was expanded
•Staffing developments were plentiful throughout 2011
- Staffing developments were most frequent in Western Europe in 2011
- Corporate level staffing developments were plentiful in 2011
TRENDS TO WATCH IN 2012
•Introduction
•Trend one: continuing economic instability will result in a volatile outlook for global wealth management
- The eurozone crisis will continue to plague the financial services industry
- The Australian economy is susceptible to an Asian slowdown, but strong consumer demand will persist
- Brazil is continuing to develop the competitiveness of its economy
- The Chinese economy is slowing down, but from a high growth rate
- Germany reduced its growth forecast for 2012
- India has to resolve domestic issues quickly
- The current positive signs in the UK economy mask fundamental issues
- The US has seen unexpected growth in domestic demand
•Trend two: the global wealth market will still be dominated in broad terms by mature markets, but emerging markets will continue to erode their dominance
- Asia Pacific will continue on its march to overtake Western Europe as the second largest regional wealth market
- The top 10 country wealth markets will change in 2012
- The worst 10 performing country wealth markets
•Trend three: offshore banking will continue to falter under regulatory pressure, but will also benefit from political instability
- Tax amnesties will continue to encourage the regularization of undeclared offshore assets
- Increased focus on selected international banking hubs will push clients toward alternative financial centers
- For some countries, FATCA will not be the regulatory burden that was once feared, but increased compliance, training, and costs will prevail
- The focus of indebted governments on offshore assets will encourage wealth managers to distance themselves from irregular clients and to seek a stronger onshore presence
- Prevailing social insecurity and political instability will encourage selected high growth wealth markets into offshore banking
•Trend four: the approach to and the composition of the wealth management product mix will change
- The prevailing economic environment will demand greater emphasis on liquidity and product suitability
- Increased desire for involvement in financial matters will prompt rising demand for self-directed accounts
- Basel III will encourage less capital-intensive business, but investment banking will remain important for targeting ultra-high net worth customers
•Trend five: the quest for transparency and compliance will continue to encourage pricing and fee management innovation
- The uptake of "clean fee" pricing will increase as firms not only look to become compliant, but also look to attract clients disenchanted by low returns
- Platforms will continue to rise in popularity across the globe as platform functionality is improved and wealth managers chase global wealth
- Effective fee management will become progressively more crucial
•Trend six: new channels will transform how wealth managers communicate and conduct business with their clients
- The wealth management industry can no longer ignore the significance of social media
- Usage of tablet computers among both clients and advisors will continue to increase
APPENDIX
•Definitions
- Affluent
- HNW
- Mass affluent
- Measures of growth
- Onshore
•Methodology
- Datamonitor's Wealth Management Competitor Tracker
- Global wealth markets databases
- Global Wealth Managers Survey 2011
- Financial Services Consumer Insight Survey 2011
•Further reading
•Bibliography
•Ask the analyst
•Disclaimer
TABLES
•Table: Selected organic growth developments in Asia Pacific, 2011
•Table: Selected M&A developments in Western Europe, 2011
•Table: Selected corporate level staffing developments, H2 2011
•Table: Selected UHNW staffing developments, 2011
•Table: Tax amnesties vary in leniency but continue to encourage regularization of undeclared assets
•Table: Hong Kong, Singapore, and Liechtenstein offer attractive alternatives to offshore centers under the spotlight of tax investigations
•Table: Selected wealth markets with high growth forecasts and high demand for offshore banking
•Table: Selected Bahraini wealth managers with international banking units
•Table: Selected Brazilian wealth managers with international banking units
•Table: Selected Colombian wealth managers with international banking units
•Table: Selected Russian wealth managers with international banking units
•Table: Selected Saudi Arabian wealth managers with international banking units
•Table: A number of global wealth managers already have established business collaboration units
•Table: A number of platform providers are moving toward an unbundled approach in the UK
•Table: A number of investment houses are adapting to the unbundled trend
•Table: The top-10 wealth managers have embraced new communication channels in varying degrees
•Table: A number of US wealth managers launched or upgraded iPad services in 2011
•Table: Total annual global shipments of tablets and other mobile Internet devices, 2010–16
•Table: Datamonitor's Wealth Management Competitor Tracker covers the following 100 companies
FIGURES
•Figure: Suitability is key for riskier products
•Figure: Global sales of tablets and other mobile Internet devices will continue to rise dramatically
•Figure: 2012: Trends in Global Wealth Management leverages data from a number of sources
•Figure: The eurozone sovereign debt crisis weighed heavily on the global wealth market in 2011
•Figure: 2011 was a challenging year for the eurozone
•Figure: There were a number of key regulatory and tax developments in 2011
•Figure: Product innovation and customer targeting developments surpassed M&A, partnerships, and organic growth
•Figure: The distribution of competitor developments has changed since 2008
•Figure: September and November were the most active months for M&A in 2011
•Figure: Organic growth was focused in Asia Pacific, while Western Europe led the way in M&A activity
•Figure: Product innovation picked up pace in the second half of 2011
•Figure: Product innovation was most active in North America and customer targeting was most active in Western Europe
•Figure: Staffing developments were frequent all year, but picked up further in H2 2011
•Figure: Staffing developments were most active in Western Europe
•Figure: 32% of all staffing developments were at the corporate level in 2011
•Figure: World GDP growth rates, 2011–15
•Figure: High growth in Central and Eastern Europe, Latin America, Middle East and Africa, and Asia Pacific will prevail during 2011–15
•Figure: North America will remain the largest regional market up to 2015
•Figure: Western Europe and Japan each have over 50 million affluent individuals but limited growth prospects
•Figure: The US will remain the largest wealth market during 2006–15f
•Figure: Greece is the only country forecast to show negative asset growth in 2011–15f
•Figure: Different tax amnesties will produce different trends in the coming years
•Figure: Tax amnesty penalties are becoming more severe
•Figure: Selected wealth markets around the world will continue to seek offshore banking
•Figure: Allocation into the major asset classes will not change greatly in the next two years, but both clients and wealth managers will change their attitudes to product suitability
•Figure: Suitability is key for riskier products
•Figure: Demand for execution-only products will increase within the next two years
•Figure: InvestorBee allows clients to compare their finances and risk profile against their peers
•Figure: UHNW clients will benefit from greater access to group-wide products and services
•Figure: Quartal Fee Manager manages all fee-generating operations under one system
•Figure: The majority of wealth managers do not plan to launch social media campaigns
•Figure: Mass affluent and HNW clients are increasingly active on social media
•Figure: Asia Pacific and Middle East clients are most interested in social media
•Figure: Wealth managers can take either an indirect or direct approach to social media
•Figure: The FINRA's rulings on social media can be used to create a compliance strategy and parameters for social media strategy
•Figure: Actiance and Socialware offer targeted financial services social media compliance software
•Figure: Tablet computers have benefits for both the client and the advisor
•Figure: Global sales of tablets and other mobile Internet devices will continue to rise dramatically
•Figure: Fidelity continues to enhance the visual aspect of its iPad app
•Figure: The SunGard Wealth Station Mobile Meeting app has extensive functionality
•Figure: Global Wealth Managers Survey 2011 geographic coverage
Companies mentioned
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Private Banking Industry: 2012: Trends to Watch in Global Wealth Management
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