The European Wealth Management Market: A Strategy and IT Perspective

by Isabella Fonseca, April 15, 2008

Abstract

New York, NY, USA April 15, 2008

The wealth management industry is in a period of strong expansion. The global market for wealth management IT will reach US$3.9 billion in 2008, an 11% increase from 2007.

The concept of wealth management encompasses a broad set of services focused on managing clients' wealth. Some of these services are known by different classifications within the industry: private banking, portfolio management, asset management, and financial planning. Slowly, as banks sought means of differentiating their services, wealth management services moved downmarket to address a broader customer base.

In , Celent examines the European wealth management industry, including trends, major market developments, spending on technology, and available advisor solutions.

The study has identified the following major findings:

  • Celent estimates the European market for wealth management IT will reach US$1.7 billion by the end of 2008, representing an increase of 14% over 2007.
  • Client segmentation is fundamental for the evolving market of private banking and wealth management. There is a range of key segmentation criteria beyond the level of wealth that could enable private banks to break down client groups into subsegments. This whole concept has been the basis for the evolution of wealth management services.
  • Financial institutions targeting wealth management clientele are constantly evaluating their overall value proposition by developing more effective ways of building differentiation.
  • There are 10 pillars of wealth management technology: CRM/contact management, financial planning, portfolio management, portfolio monitoring, reporting, portfolio construction, model administration, workflow management, compliance, and central data repository. Celent has identified 12 wealth management technology providers in the European market, providing basic background information, target market, and solution focus.

"The European wealth management market is going through a transition period where expansion and efficiency are key components in remaining competitive," says Isabella Fonseca, Celent senior analyst and author of the report.

"While client segmentation plays a major role, there are other important issues, such as efficient client management and an open architecture," she adds.

The report is a guide for financial institutions interested in understanding the European wealth management market from a strategic and technological perspective. The study analyzes the different strategies employed by banks with regard to their wealth management services.

The report is 36 pages long and contains nine figures and eight tables. A table of contents is available online.

Members of Celent's Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

New York, NY, USA April 15, 2008

Executive Summary 03
Introduction 04
Market Overview 07
  Client Segmentation 07
  Effects of Consolidation Activity in the Market 14
Best Practices in Wealth Management 16
  Sources of Revenues 17
  Differentiation 18
The Role of Technology 21
  Vendor Landscape 23
  Technology Differentiators and Latest Developments 27
Technology Spending 31
Conclusions 34

 

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