Abstract
Introduction
This report provides an overview of the major competitive trends during 2010
and what the top 10 global players, including Pictet, RBC, HSBC, UBS, Credit
Suisse and Wells Fargo; were doing in terms of their positioning. The report
also provides Datamonitor' s Wealth & Investments team predictions on the top
trends in global wealth management for 2011.
Features and benefits
• Use this report to gain insight into which
territories and client segments the leading wealth managers are
targeting
• Identify which wealth mangers have been
most active over the last year and what the largest have focused their
efforts on
• Find out what trends will be shaping the
competitive strategies of wealth managers over the coming year.
Highlights
With all of the threats - be they regulatory, economic, or financial
- that can potentially impact upon other banking activities, many of the
leading banking groups around the world prioritized growth in the wealth
management market as a key part of their overall strategies in the lead up to
2010 and beyond.
With the credit crisis and global recession having a hugely negative effect
on the financial services market in 2009, announcements concerning M&A,
partnership agreements, and organic growth tapered off. The higher pace of
such developments in 2010 means that wealth managers have shifted competitive
strategies back to a more normal footing.
In order to combat commoditization, private banks and wealth managers of all
types will engage in greater customer segmentation, setting up specialized
teams and services designed to appeal to certain ethnic, geographic, national,
professional, and social groups.
Your key questions answered
• What will be the major trends affecting competition in 2011?
• What geographies experienced the most staffing changes in 2010?
• Where are global players looking to expand and how?
• What new types of client segmentation are being used by leading wealth
managers to gain advantage in the market?
Table of Contents
Executive Summary
M&A and organic growth in Asia drove the competitive
strategy of many top wealth managers
February and November were the most
active months for business deals and expansions
Bank of Singapore, OCBC' s new private
wealth brand, was one of the most high profile new wealth brands in 2010
Key players upgraded their presence in
the regional centers of Asia Pacific and the Middle East
While the focus was on Asia, wealth managers still had to
compete in developed markets
The developed wealth markets of Western
Europe and North America accounted for the majority of staffing
announcements
Just under half of all new products were
launched for the European market
Customer targeting was focused on wealth
segments in 2010 but is showing increasing sophistication
Competitive trends in 2011 will be less driven by the
fallout of the credit crisis
M&A will be focused on consolidation of
smaller players and businesses in desirable markets
Wealth managers emerging markets strategy
will shift to building up operations in target markets
Competitors will focus more on building
up those parts of the business that offer the highest margin
Social media and mobile technology will
increasingly be a battle ground for clients
Hiring and retaining key personnel will
be increasingly challenging
Additional specialized client
segmentation propositions will be developed to give banks an edge over
rivals
OVERVIEW
Catalyst
Summary
Methodology
KEY COMPETITIVE TRENDS OF 2010
Introduction
Wealth managers the world over faced increased competition
in 2010
The steady income and growth of the
wealth management market has become more attractive since the financial
crisis
Lower capital costs in wealth management
make the business more attractive when capital is expensive and scarce
M&A and organic growth in Asia drove the competitive
strategy of many top wealth managers
February and November were the most
active months for business deals and expansions
M&A activity was popular in Europe, while
in Asia wealth managers were more inclined to pursue organic growth
Citigroup was the most active pursuant of
organic expansion in 2010
Major new entrants were rare, but competition within
regions is more intense than ever
In the Asia Pacific region a greater
number of major wealth players are in direct competition with each other
New wealth brands entering the market in
2010 sought to tap into client dissatisfaction at poor returns
2010 saw many key players upgrade their
presence in regional centers
With so many wealth managers hungry for growth, competition
for experienced staff has been high
Wealth managers have made a significant
number of staffing changes in 2010
Staffing changes have been elevated in
recent years as companies seek out talented individuals
The developed wealth markets of Western
Europe and North America accounted for the majority of staffing
announcements
Barclays made significant personnel
changes to its UK operations and has overall to its wealth arm
Expanding product and service ranges have also been areas
of competition over the last year
Wealth managers have focused more on
customer targeting than the launch of new products
Customer targeting has typically been
focused on wealth segments but is showing increasing sophistication
Just under half of all new products were
launched for the European market
Citigroup was most active in terms of
developing its client targeting strategy in 2010, and launched a variety of
new programs
TOP WEALTH MANAGEMENT COMPETITORS
Introduction
Bank of America Merrill Lynch
Its aim in 2010 was more focused on
building up its strong position in the Americas
The Americas, particularly the US, were
the focus of much of Bank of America Merrill Lynch' s activity
Bank of America Merrill Lynch formed a
partnership with Melbourne-based broker Evans & Partners
Credit Suisse
Like many private Swiss banks, Credit
Suisse has continued to build its global on and off-shore presence
Credit Suisse is developing its wealth
operations in Asia and the Middle East
Credit Suisse has benefited from the
financial crisis driving clients to stable banks
Deutsche Bank
Deutsche Bank sought to shore up its
business in its core markets, although it is also committed to expanding in
Asia
Deutsche Bank was one of the most active
big wealth managers in terms of acquisitions
The bank has worked on its brand and used
social media to become more competitive in the market
HSBC
HSBC refined its mass affluent offering
in 2010 and expanded its US presence
The US was the target of several key
retail branch expansions that included significant wealth components
HSBC Advance was rolled out to the
world' s potential mass affluent
Morgan Stanley Smith Barney
Morgan Stanley has sought to expand its
wealth presence at the expense of more risky divisions
Organic growth targets abroad have made
Morgan Stanley Smith Barney more of a competitive threat globally
The bank was active in customer targeting
in the US and more broadly across the world
Integration of its 2009 acquisition Smith
Barney preoccupied Morgan Stanley in 2010
Pictet
Pictet remained committed to its
specialist private banking proposition
Prix Pictet was once again the most high
profile activity conducted by the bank, garnering attention from the likes of
the Financial Times
RBC
The Canadian bank has pursued expansion
in the wealth market through M&A and organic growth
RBC made several key acquisitions in 2010
that bolstered its international operations
Organic growth was supported by the
opening of new offices and centers abroad
UBS
UBS' s global aims for 2010 focused on
building onshore capabilities and its UHNW market offerings
A key part of UBS' s global competitive
strategy involved reviving its brand
Wells Fargo
Wells Fargo aims to become a greater
force in US wealth management
Integrating the wealth operations of
Wachovia and Wells Fargo has been a major focus of the bank
IMPLICATIONS FOR COMPETITION IN 2011
Introduction
Trend one: M&A activity will be increasingly driven by
consolidation among boutiques
The credit crunch and its forced
divestments will no longer drive M&A activity
Deal volume and value may remain elevated
in 2011 but size will be reduced
Trend two: the emerging markets strategy will shift to
building up operations rather than simply establishing them
Regional offices and branches deepen the
penetration of large global wealth managers in the Middle East
Banks will improve on their Asia
servicing with investments that focus on local capabilities
The rise of Singapore and Hong Kong as
the pre-eminent offshore wealth centers will continue
Trend three: wealth managers will focus more on building
margin into their business
Wealth managers will struggle to get
their clients into higher margin products
Cost control will become more important
even in developing markets
Offering credit products has become a
more popular means of gaining greater wallet share
Trend four: wealth managers will still be finding their
feet with social media and technology
New apps and tools released by wealth
managers will take the market beyond its baby steps
Private banks will have a social media
presence, but not a particularly effective one
More social networks like tiger 21 will
connect HNW individuals
Trend five: tight labor markets will cause higher staff
turnover and threaten targets
Employee retention will remain an
important concern for wealth managers
Staff for country desks that combine
cultural knowledge and experience will be highly sought after
Star performers will be able command an
increased premium in the wealth market
Trend six: client segmentation and customer targeting will
be used to a greater extent in 2011 in order to stay competitive
Additional specialized propositions will
be developed to give banks an edge over rivals
Cultural and ethnic desks will be used to
tap into the highly international nature of the HNW client base
Social segments like singles, divorcees,
and LGBTs are becoming more important for wealth managers in mature
markets
Increased attention will be paid to
wealthy women by competitors eager to service the growing female market
Wealth managers are realizing that
targeting professional groups is an effective way to build up a client
base
APPENDIX
Methodology
Each month, Datamonitor tracks the most
relevant announcements from 53 competitors
Primary Research
Further reading
Ask the analyst
Datamonitor consulting
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