Table Of Contents
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
List Of 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
List Of 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