The Future of Private Banking: A Wealth of Opportunity?

June 26, 2008

Abstract

New York, NY, USA June 26, 2008

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Despite the recent market turmoil, wealth pools will continue to expand across all regions, particularly in new markets such as the Asia-Pacific region, the Middle East, and Latin America.

With more people becoming wealthy and wealth concentration increasing, the private banking industry has been soaring. The global pool of investable assets of high net worth individuals grew by 11% annually over the past five years, reaching US$50 trillion in 2007. Given the underlying market dynamics, we expect growth to moderate over the next five years, with global wealth pools reaching US$75 trillion in 2012. This implies a compound annual growth rate of 9%.

The Future of Private Banking examines the global wealth management landscape by looking at regional (and sometimes cultural) differences. In some areas, the assets exist but may be less accessible to wealth management firms.

The challenge for private banks and other wealth management firms is adding value. This report identifies five major areas of value creation: segmentation, products, client relationships, branding, and risk management. It concludes with recommendations for firms seeking opportunities in this enormous global market.

The report is 62 pages. A table of contents is available online.

 

Members of Celent's Wealth Management and Retail Banking research services 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 June 26, 2008

Executive summary 3
Key terminology 7
The outlook for global wealth 9
  Steady growth, but search for sweet spots 9
  Whither offshore? 10
  Going onshore 12
Size isn't everything -- Taking a value perspective 15
  How accessible is the wealth? 15
  Distribution rules 16
  Corporate structures -- Will break-ups create value? 24
Opportunities for value creation 33
  Creating value in segmentation -- Capturing entrepreneurs 33
  Creating value through products -- Lending 38
  Creating value through client retention -- Institutionalizing client relationships 42
  Creating value by branding -- Differentiating and driving revenues 46
  Creating value via risk management -- Taking a seat at the decision-making table 50
Your next steps? 55
Terminology used in this report 57
Appendix on market sizing technology 59

 

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