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Competitive Dynamics in Brazilian Wealth Management Product Image

Competitive Dynamics in Brazilian Wealth Management

  • Published: October 2012
  • Region: Brazil
  • Datamonitor

FEATURED COMPANIES

  • Bradesco Private Bank
  • Lerosa Investimentos
  • Santander Private Banking
  • MORE

Wealth creation, GDP growth, and initial public offerings of Brazilian firms are driving the Brazilian wealth management industry and interest is high from both domestic players looking to enhance their position in the market, and foreign players looking to diversify. Here Datamonitor Financial takes an in-depth look at the competitive scene in Brazilian wealth management.

Scope

- Understand the market through analysis of different business models and how they derive income.

- Analyse the current recruitment situation for private bankers and average salaries.

- Interpret competitive trends in the market through a breakdown of M&A, organic growth and partnerships developments.

- Assess your competition through detailed profiles of notable players, including the customer targeting, marketing and product strategies they employ.

Highlights

- The integrated private banking units of universal banks hold considerable market share in the domestic wealth management market. Wealth management firms are more numerous, but it is the integrated private banks that lead the market. Independent brokerage firms offering direct and online trading to READ MORE >

OVERVIEW

- Catalyst
- Summary
- Methodology

EXECUTIVE SUMMARY

MARKET STRUCTURE

- The Brazilian domestic wealth market is served by a range of players but universal banks hold the majority of the market - The majority of high net worth client assets are held in integrated private banks
- Wealth management firms dedicated solely to asset management are numerous
- Independent brokerage firms offering direct and online trading to the retail market are plentiful
- Minimum investment thresholds vary across the business models - Brokerages target the mass affluent population with $250,000–500,000 in minimum investments
- Wealth management firms are not subject to a client minimum investment capacity classification but global standards apply
- Private banks target clients with over BRL3m ($1.5m) in investable assets
- Multi-family offices target those with $10m in investable assets
- The offshore market is led by universal banks but regional firms are entering the market
- Key factors shaping the competitive environment in Brazil - The regulatory environment in Brazil favors no business model over another
- Different business models require different certification from Brazilian regulatory bodies
- The majority of Brazilian wealth managers derive income from assets under management and pay their relationship managers a bonus based on profitability

COMPETITIVE TRENDS

- Inward M&A activity has not been as buoyant as some expected - Foreign firms have encountered strong competition from local firms and red tape has stalled activity
- Some foreign firms have retreated or remained offshore to serve Brazilian clients

- Organic growth in Brazil has also been muted as São Paulo and Rio de Janeiro remain the key centers for wealth management

KEY COMPETITORS

- The integrated private banks dominate the Brazilian wealth management market
- Key competitors in depth - Bradesco Private Bank
- Lerosa Investimentos
- Santander Private Banking
- Verus Gestão de Patrimônio

APPENDIX

- Definitions
- Affluent
- Mass affluent
- High net worth (HNW)
- Liquid assets
- Methodology
- Overall methodology
- Further reading
- Selected bibliography
- Ask the analyst
- Disclaimer

TABLES

- Table: Market participants profiled in this report
- Table: Firms operating "private banking" units follow the universal or investment banking model
- Table: Wealth management activity is led by asset managers and family offices
- Table: Brokerage houses offer a mixture of execution-only and managed services
- Table: Different business models have different regulatory requirements
- Table: Foreign firms have favored local acquisitions over organic growth in Brazil
- Table: Key competitors by business model
- Table: Key facts: Bradesco Private Bank
- Table: Key facts: Lerosa Investimentos
- Table: Key facts: Santander Private Banking
- Table: Key facts: Verus Gestão de Patrimônio

FIGURES

- Figure: Specific business models lead different parts of the Brazilian market
- Figure: The number of private banking professionals with the CFP qualification is rising
- Figure: Remuneration in Brazil is high when compared to other high growth wealth markets
- Figure: Brazilian relationship managers earn a bonus based on profits
- Figure: The central-western and northern regions are a rising opportunity for local and foreign wealth managers
- Figure: Bradesco Private Bank sits within Bradesco's retail unit but benefits from other units as well
- Figure: Bradesco targets both the mass affluent and HNW markets
- Figure: Bradesco as a group is very active in social media but its private bank maintains a low profile
- Figure: Lerosa has diversified from a pure brokerage since its launch in 1967
- Figure: Santander Private Banking sits within the commercial banking unit of Santander Brazil
- Figure: Santander awards affluent customers with exclusive services but there is a large gap between the mass affluent and HNW propositions
- Figure: The Santander Unlimited MasterCard Black offers numerous benefits
- Figure: Santander has a large social media presence but its private banking unit remains unconnected

- Bradesco Private Bank
- Lerosa Investimentos
- Santander Private Banking
- Verus Gestão de Patrimônio

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