Wealth Management Super League 2016; Comparing the Performance of the World's Leading Wealth Managers

  • ID: 3927282
  • Report
  • Region: Global
  • 45 pages
  • GlobalData
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  • ABN Amro
  • Charles Schwab
  • Credit Suisse
  • HSBC Private Bank
  • Northern Trust
  • Royal Bank of Canada
  • MORE

Super League competitors combined wealth management client AUM slowed its expansion in 2015, improving only by 0.9% over 2014. The reduced growth is reflective of wealth managers’ divesting activity, but also challenging market conditions. Nevertheless, the majority of competitors recorded positive (if lower than a year ago) new money flows, suggesting the return of clients’ confidence in their advisors’ skills. Looking forward, however, 2016 results will reveal whether HNW investors are indeed ready to trust the biggest players with their money. At the end of 2015, client assets booked with the world’s 25 leading private wealth managers grew by 0.9%. The top three rankings remained unchanged, with Switzerland’s UBS leading the way, followed by the US players Bank of America (BoA) Merrill Lynch and Morgan Stanley. Although industry-wide growth was much weaker than a year ago, pushed down by challenging market conditions and exchange rate fluctuations, most competitors maintained positive new money flows. Key points include:

  • Combined private clients’ assets under management (AUM) held with Super League wealth managers stood at $8.6tn in 2015. More than half of these assets were booked with the largest four players.
  • Net inflows in the Super League remained strong in 2015, although they decreased for the first time since 2012.
  • Only half of the top wealth managers succeeded in growing their profits in 2015, though the vast majority stayed in the black.
  • Growing costs and contracting margins remain the challenge for all major players, as the average cost/revenue ratio of the largest 25 wealth managers stood at an all-time high in 2015.

Critical success factors:

  • Innovative investment products will be key to AUM growth - 2015 saw increased volatility in capital markets, which had a direct impact on wealth managers’ AUM figures. With unsteadiness continuing in 2016, clients are likely to seek alternatives to their current portfolios. Competitors that fail to provide attractive options will suffer from negative money flows.
  • Seeking efficiencies is critical - Most competitors in 2015, even those that grew their profits, were struggling with growing costs. While some of these can be considered out of control and related to legacy legal investigations, wealth managers should look to improve efficiency where possible. This can be achieved through leveraging technology or streamlining processes.
  • Existing locations cannot be neglected - The biggest players continued to divest from non-core locations in order to focus on growth markets, in many cases Asia Pacific.

However, consequently the competition will be fierce in this region and growing a presence in this market can prove costly. At the same time, smaller wealth managers have already started growing their market shares in other locations, potentially posing a threat to established players here. The report “Wealth Management Super League 2016; Comparing the performance of the world's leading wealth managers” benchmarks the world’s leading wealth managers by managed client assets and financial performance. The report covers the 25 most prominent institutions, including standalone private banks and wealth managers, as well as competitors that are part of larger universal financial groups.

In particular, this report allows the following:

  • Analyzes historical growth, as well as perspectives for further development of AUM, both in terms of current asset base expansion and attracting new money.
  • Compares the profitability of the covered competitors, examining sources of revenue and the largest components of the cost base.
  • Examines how wealth management units folded into larger organizations contribute to the wider business of the competitor in question.
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  • ABN Amro
  • Charles Schwab
  • Credit Suisse
  • HSBC Private Bank
  • Northern Trust
  • Royal Bank of Canada
  • MORE
1. Executive Summary
- AUM at the top private wealth managers grew by just 0.9% in 2015
- Key findings
- Critical success factors

2. Benchmarking Wealth Managers By Client Assets
- 2015 saw the top wealth managers' market share drop
- Swiss and US banks dominate the ranks of the top five wealth managers by AUM
- The top five wealth managers accounted for $4.8tn of client assets
- Few wealth managers experienced AUM contractions in 2015
- Private wealth management is typically the main focus of Super League players
- Competition for smaller-scale investors has been fierce, raising the threshold for the 'marginal client'
- US broker dealers dominate when measuring wealth managers by AUA
- The largest US broker dealers had almost $5tn in assets
- Overall wealth managers' AUA growth in 2015 was negative
- A key element of wealth manager AUA, brokerage assets have been held back by equity markets and growing competition
- Net inflows remained strong in 2015, though lower than in 2014
- In 2015, positive inflows saved wealth managers from AUM contraction
- 2016 will test investors' trust in wealth managers' skills

3. Benchmarking Wealth Managers by Financial Performance
- Group-level performance remains volatile, though 2015 was a good year in general
- Combined Super League profits stood at all-time highs as competitors dealt with one-offs
- The contribution of wealth management operations varies greatly
- Most wealth management divisions reported profits in 2015
- However, these profits were generally lower than in 2014
- Even profitable wealth units face growing cost bases and shrinking margins

4. Appendix
- Abbreviations and acronyms
- Supplementary data
- Methodology
- Competitor coverage
- Client assets data
- Financial performance data
- Exchange rates
- Bibliography
- Further reading
- About the Author
- Disclaimer

List of Tables

Table 1: Super League wealth managers' published private clients AUM ($bn), 2014-15
Table 2: Wealth management unit standard minimum thresholds, 2015
Table 3: Super League wealth managers' AUA ($bn), 2014-15
Table 4: Super League wealth managers' net new money ($bn), 2010-15
Table 5: Comparison of selected wealth managers' retail and private client AUM ($bn), 2013-15
Table 6: US wealth managers' brokerage assets ($bn), 2010-15
Table 7: Super League competitors' profit before tax at group level ($bn), 2014-15
Table 8: Super League competitors' wealth management units' contribution to group revenues (%), 2014-15
Table 9: Super League competitors' profit before tax at wealth management division level ($bn), 2014-15
Table 10: Super League competitors' operating revenues at wealth management division level ($bn), 2014-15
Table 11: Super League competitors' operating expenses at wealth management division level ($bn), 2014-15
Table 12: Competitors tracked in Super League analysis
Table 13: Wealth divisions tracked in Wealth Management Competitor Analytics
Table 14: Competitors for which estimates have been used
Table 15: US dollar exchange rates, December 31, 2014, and December 31, 2015

List of Figures

Figure 1: The top wealth managers' AUM growth has been slowing
Figure 2: The largest wealth managers struggled with AUM growth in 2015
Figure 3: Only two competitors recorded double-digit AUM growth in 2015
Figure 4: Most Super League competitors are focused on private rather than retail clients
Figure 5: Most wealth managers recorded lower AUA in 2015 compared to 2014
Figure 6: Growth in wealth managers' brokerage operations has been slowing
Figure 7: Super League wealth managers have been recording positive net new money flows since 2010
Figure 8: In 2015 net new money decreased for the first time since 2012
Figure 9: BNP Paribas nearly tripled its net inflows between 2014 and 2015
Figure 10: Only four Super League competitors recorded losses at group level in 2015
Figure 11: Private banks are not the core business of the large banking groups
Figure 12: Only two competitors' wealth divisions recorded losses in 2015
Figure 13: The cost/revenue ratio has been increasing since the financial crisis
Figure 14: Few competitors managed to reduce operating expenses in 2015
Figure 15: Rising costs continued to affect wealth managers' profits
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  • ABN Amro
  • Bank of America Merrill Lynch
  • Barclays
  • BNP Paribas
  • BNY Mellon
  • Charles Schwab
  • Citi Private Bank
  • Citigroup
  • Credit Suisse
  • Crédit Agricole
  • Deutsche Bank
  • Goldman Sachs
  • HSBC
  • HSBC Private Bank
  • JP Morgan
  • Julius Baer
  • Morgan Stanley
  • Northern Trust
  • Pictet
  • RBC
  • RBS
  • Royal Bank of Canada
  • Royal Bank of Scotland
  • Santander
  • Société Générale
  • Standard Chartered
  • UBS
  • US Trust
  • Vontobel
  • Wells Fargo
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