Contents:

TABLE OF CONTENTS EXECUTIVE SUMMARY 3 Market Context 3 Competitive Dynamics 4 Future Decoded 6 INTRODUCTION 21 What is this report about? 21 Who is the target reader? 21 How to use this report 22 MARKET CONTEXT 23 Introduction 23 Wealth market drivers 23 The nature of wealth generation 23 Economic and financial backdrop 25 Net effect on liquid wealth 28 European HNW market overview 30 Country comparison: Number of HNW Individuals 33 Country comparison: Liquid assets of HNW Individuals 36 European HNW market data 39 Country specific HNW market data 42 France 42 Germany 43 Italy 44 Nordic Region 45 Spain 50 UK 51 COMPETITIVE DYNAMICS 52 Introduction 52 European competitive landscape 52 Jumping on the wealth management bandwagon 53 Europe’s place in the global wealth management game 53 Product/service substitution 55 Managing market conditions 57 Enhancing financial performance 59 Wider strategic issues requiring a response 65 Organization and structure 66 Product and service proposition 67 Investment Process 69 Technology 71 Competitive environment: France 72 Competitive environment: Germany 74 Competitive environment: Italy 76 Competitive environment: Nordic region 78 Competitive environment: Spain 79 Competitve environment: UK 81 European competitor data 84 Selected financial performance data 84 Selected assets under management data 87 Global ranking of wealth managers: Top 25 89 FUTURE DECODED 90 Introduction 90 Economic and financial outlook 90 Forecast assumptions 90 European HNW forecast overview 92 Country comparison: HNW Individual forecasts 93 Country comparison: HNW liquid asset forecasts 96 European HNW forecast data 99 Country specific forecast data 102 France 102 Germany 103 Italy 104 Nordic region 105 Spain 110 UK 111 APPENDIX 112 Research Methodology 112 New developments to the Global Wealth Model 112 The New Methodology 112 The UK sub model 113 European sub model 113 Differences to the old model 113 Forecasting methodology 114 Further information 114 Definitions 115 Further reading 118 Savings & Investment Reports 118 Global Wealth Service: Insight reports 118 Global Wealth Service: Competitor Tracking 118 Financial Services Consulting 119 SPP writing team 120 LIST OF TABLES Table 1: Number of European high net worth individuals by country, 1997-2002 39 Table 2: Number of European high net worth individuals by liquid asset band (EUR), 1997-2002 39 Table 3: Number of European high net worth individuals across European countries, segmented by liquid asset band, 2002 40 Table 4: Aggregate liquid assets of European high net worth individuals by country, 1997-2002 40 Table 5: Aggregate liquid assets of European high net worth individuals by asset band (EUR), 1997-2002 41 Table 6: Aggregate liquid assets of European high net worth individuals across European countries, by liquid asset band (EUR), 2002 41 Table 7: Number of French high net worth individuals by liquid asset band (EUR), 1997-2002 42 Table 8: Aggregate liquid assets of French high net worth individuals segmented by liquid asset band (EUR), 1997-2002 42 Table 9: Number of German high net worth individuals by liquid asset band (EUR), 1997-2002 43 Table 10: Aggregate liquid assets of German high net worth individuals segmented by liquid asset band (EUR), 1997-2002 43 Table 11: Number of Italian high net worth individuals by liquid asset band (EUR), 1997-2002 44 Table 12: Aggregate liquid assets of Italian high net worth individuals segmented by liquid asset band (EUR), 1997-2002 44 Table 13: Number of Nordic high net worth individuals by liquid asset band (EUR), 1997-2001 45 Table 14: Aggregate liquid assets of Nordic high net worth individuals segmented by liquid asset band (EUR), 1997-2001 45 Table 15: Number of Danish high net worth individuals by liquid asset band (EUR), 1997-2002 46 Table 16: Aggregate liquid assets of Danish high net worth individuals segmented by liquid asset band (EUR), 1997-2002 46 Table 17: Number of Finnish high net worth individuals by liquid asset band (EUR), 1997-2002 47 Table 18: Aggregate liquid assets of Finnish high net worth individuals segmented by liquid asset band (EUR), 1997-2002 47 Table 19: Number of Norwegian high net worth individuals by liquid asset band (EUR), 1997-2002 48 Table 20: Aggregate liquid assets of Norwegian high net worth individuals segmented by liquid asset band (EUR), 1997-2002 48 Table 21: Number of Swedish high net worth individuals by liquid asset band (EUR), 1997-2002 49 Table 22: Aggregate liquid assets of Swedish high net worth individuals segmented by liquid asset band (EUR), 1997-2002 49 Table 23: Number of Spanish high net worth individuals by liquid asset band (EUR), 1997-2002 50 Table 24: Aggregate liquid assets of Spanish high net worth individuals segmented by liquid asset band (EUR), 1997-2002 50 Table 25: Number of UK high net worth individuals by liquid asset band (EUR), 1997-2002 51 Table 26: Aggregate liquid assets of UK high net worth individuals segmented by liquid asset band (EUR), 1997-2002 51 Table 27: Operating revenues of selected wealth managers with a European onshore presence, EUR m, 2001-2002 84 Table 28: Operating costs of selected wealth managers with a European onshore presence, EUR m, 2001-2002 85 Table 29: Operating profit of selected wealth managers with a European onshore presence, EUR m, 2001-2002 86 Table 30: Global assets under management (EUR bn) of selected wealth managers with a European onshore presence, 2001-2002 (A) 87 Table 31: Global assets under management (EUR bn) of selected wealth managers with a European onshore presence, 2001-2002 (B) 88 Table 32: Top 25 wealth managers globally by worldwide assets under management (EUR bn), 2001- 2002 89 Table 33: Forecasted evolution of total retail savings and investment markets, 2002 -2007 91 Table 34: Forecasted population of major European economies, 2002-2007f 91 Table 35: Forecasted growth in real GDP 2002 –2007f 91 Table 36: Forecasted total European HNW individuals, segmented by country, 2002-2007 99 Table 37: Forecasted total European HNW individuals, segmented by liquid asset band (EUR), 2002-2007 99 Table 38: Forecasted number of European HNW individuals, segmented by liquid asset band (EUR) and country, 2007 100 Table 39: Forecasted European high net worth aggregate liquid assets, by country, 2002-2007 100 Table 40: Forecasted European high net worth aggregate liquid assets, by liquid asset band (EUR), 2002-2007 101 Table 41: Forecasted aggregate liquid assets of European HNW individuals, segmented by liquid asset band and country, 2007 101 Table 42: Forecasted total French HNW individuals, segmented by liquid asset band (EUR), 2002-2007 102 Table 43: Forecasted French high net worth aggregate liquid assets by liquid asset band (EUR), 2002-2007 102 Table 44: Forecasted total German HNW individuals, segmented by liquid asset band (EUR), 2002-2007 103 Table 45: Forecasted German high net worth aggregate liquid assets by liquid asset band (EUR), 2002-2007 103 Table 46: Forecasted total Italian HNW individuals, segmented by liquid asset band (EUR), 2002-2007 104 Table 47: Forecasted Italian high net worth aggregate liquid assets by liquid asset band (EUR), 2002-2007 104 Table 48: Forecasted total Nordic HNW individuals, segmented by liquid asset band (EUR), 2002-2007 105 Table 49: Forecasted Nordic HNW aggregate liquid assets by liquid asset band (EUR), 2002-2007 105 Table 50: Forecasted total Danish HNW individuals, segmented by liquid asset band (EUR), 2002-2007 106 Table 51: Forecasted Danish HNW aggregate liquid assets by liquid asset band (EUR), 2002-2007 106 Table 52: Forecasted total Finnish HNW individuals, segmented by liquid asset band (EUR), 2002-2007 107 Table 53: Forecasted Finnish HNW aggregate liquid assets by liquid asset band (EUR), 2002-2007 107 Table 54: Forecasted total Norwegian HNW individuals, segmented by liquid asset band (EUR), 2002-2007 108 Table 55: Forecasted Norwegian HNW aggregate liquid assets by liquid asset band (EUR), 2002-2007 108 Table 56: Forecasted total Swedish HNW individuals, segmented by liquid asset band (EUR), 2002-2007 109 Table 57: Forecasted Swedish HNW aggregate liquid assets by liquid asset band, 2002-2007 109 Table 58: Forecasted total Spanish HNW individuals, segmented by liquid asset band (EUR), 2002-2007 110 Table 59: Forecasted Spanish high net worth aggregate liquid assets by liquid asset band (EUR), 2002-2007 110 Table 60: Forecasted total UK HNW individuals, segmented by liquid asset band (EUR), 2002-2007 111 Table 61: Forecasted UK high net worth aggregate liquid assets by liquid asset band (EUR), 2002-2007 111 LIST OF FIGURES Figure 1: The value of HNW held liquid assets has outpaced the growth in the number of HNW individuals, 1997- 2002 3 Figure 2: Less than half of competitors saw operating costs fall from 2001-2002 6 Figure 3: Forecasted breakdown of HNW individuals by liquid asset band (EUR) and by country, 2007 7 Figure 4: Methodology diagram and report structure 22 Figure 5: Conceptualizing HNW wealth drivers and flows 24 Figure 6: Finland has seen the fastest growth in real GDP over the 1995-2002 period 26 Figure 7: European stock market indices have returned to pre-1997 levels 27 Figure 8: Major European stock market indices have started to turn around in the first half of 2003 28 Figure 9: Absolute growth in retail liquid assets has varied considerably across Europe between 1997 and 2002 29 Figure 10: Distribution of European liquid wealth, by segment, 1997 versus 2002 29 Figure 11: The value of HNW held liquid assets has outpaced the growth in the number of HNW individuals, 1997- 2002 30 Figure 12: High net worth owned liquid assets versus total retail assets, 1997-2002 31 Figure 13: European HNW individuals and HNW liquid assets, segmented by liquid asset bands (EUR), 1997 versus 2002 32 Figure 14: France has overtaken the UK as the second largest HNW market in Europe, 1997- 2002 33 Figure 15: Spain has been the fastest growing HNW market, 1997-2002 34 Figure 16: The bulk of European HNW individuals fall into the EUR 300k to EUR 750k liquid asset bands, 2002 35 Figure 17: France has overtaken the UK in terms of the value of HNW liquid assets, 1997-2002 36 Figure 18: Spain and France grow fastest in terms of the value of HNW liquid assets, 1997-2002 37 Figure 19: European HNW individuals with over EUR 1.5M in liquid assets, hold close to 40% of all HNW liquid assets, 2002 38 Figure 20: Wealth managers from the US and Switzerland dominate the top 25 global private banks, 2002 54 Figure 21: Different competitor types pose different threat levels, by asset class, 2001 56 Figure 22: 32 out of 48 competitors studied reported a decline in assets under management in 2002 58 Figure 23: Only 8 out of 29 competitors studied have seen operating profits increase in 2002 61 Figure 24: Only 10 out of 30 competitors studied increased operating revenues in 2002 62 Figure 25: Only 13 out of 29 competitors studied reduced operating costs in 2002 64 Figure 26: Longer-term strategic options for European wealth managers 68 Figure 27: Deconstruction of the investment process is focusing some wealth managers on a smaller number of core activities 70 Figure 28: 3.6m European HNW individuals will hold EUR 2,936bn in liquid assets by 2007 92 Figure 29: HNW individuals are set to continue to take an increasing share of total liquid assets through to 2007 93 Figure 30: Spain is forecast to be the fastest growing HNW market in terms of the number of individuals, 2002-2007 94 Figure 31: Forecasted breakdown of HNW individuals by liquid asset band (EUR) and by country, 2007 95 Figure 32: Forecasted growth in the value of HNW liquid assets, segmented by country, 2002-2007 96 Figure 33: Forecasted breakdown of HNW held liquid assets by liquid asset band (EUR) and by country, 2007 97