Global Wealth Management: Competitive Dynamics 2018

1.1. 2017 was a good year for the wealth management industry
1.2. Key findings
1.3. Critical success factors

2.1. Growth in Super League assets accelerated in 2017, riding a market expansion
2.1.1. The top wealth managers regained market share in 2017, outgrowing the market
2.2. Traditional Swiss and American banks remain the market leaders by AUM
2.2.1. The top private wealth managers remain unassailable barring large-scale consolidation
2.3. All of the big shifts among the top managers were due to exceptional growth in AUM
2.3.1. Most of the big moves were from wealth managers with modest private wealth books
2.3.2. Only three of the top wealth managers saw their AUM drop in 2017, an improvement on 2016
2.3.3. UK players saw big gains in their AUM as the result of reorganization
2.3.4. Acquisitions are still boosting the Singaporean banks up the rankings
2.4. There has been little change in the focus of the private banks
2.4.1. Leading wealth managers are still primarily operating in the HNW space
2.4.2. Citigold and HSBC Premier boast two of the most established mass affluent investor propositions, but other banks are keen on this segment too
2.4.3. Asian wealth managers are pursuing wealth management at all AUM levels but have not yet pushed robo-advice
2.4.4. Robo-advisors offer a way to access small-scale investors but require careful positioning
2.5. Net new money to the top wealth managers surged in 2017
2.5.1. Almost all Super League competitors saw positive growth in client inflows
2.5.2. Over half of the net inflows tracked were from BoA Merrill Lynch, UBS, and Morgan Stanley alone
2.5.3. There is a continued shift away from offshore, continuing recent trends first established in the global financial crisis

3.1. Group performance improved but wealth divisions were stronger still
3.1.1. Group profits have bounced back from the 2016 slump
3.1.2. Super League competitors have been reshaping their business towards greater wealth management
3.2. The cost-to-revenue ratio edged down in 2017 after significant improvements in 2016
3.2.1. Improving ratios suggest only modest gains in efficiency at the world’s leading wealth managers
3.2.2. Cost-to-income ratios were flattered by a retreat from markets where players lack scale

4.1. Abbreviations and acronyms
4.2. Supplementary data
4.3. Methodology
4.3.1. Wealth manager competitor data collection
4.3.2. Exchange rates
4.4. Bibliography
4.5. Further reading

Table 1: Private wealth management unit standard minimum account thresholds
Table 2: Robo-advisor offerings among selected wealth managers, November 2018
Table 3: Retail wealth management client asses of selected competitors, 2015-17 ($bn)
Table 4: Net new money from reporting Super League competitors, 2011-17 ($bn)
Table 5: US dollar exchange rates

Figure 1: The top international wealth managers are gaining ground among HNW clients
Figure 2: All but Credit Suisse are pulling away from the pack, though Credit Suisse should perform better in 2018
Figure 3: Reshaping the book has wiped out any gains in size that 2017 should have generated for EFG
Figure 4: ABN Amro’s divestment overwhelmed its strong performance across the rest of the private bank
Figure 5: Both UK majors were back among the highest growing after years in the wilderness
Figure 6: Asian wealth managers typically leverage their massive retail banks, and so have large retail client books
Figure 7: OCBC has three programs for investors of varied wealth, capturing the maximum retail wealth possible
Figure 8: Super League net inflows were strong in 2017, suggesting a peak in the market that banks will struggle to replicate in 2018
Figure 9: JP Morgan risks being eclipsed by RBC and Julius Baer in the top five if current net new money trends hold
Figure 10: 12 of the groups tracked saw group profits change by more than a quarter in 2017, highlighting volatility
Figure 11: Wealth divisions became less of a profit driver in 2017
Figure 12: Most diversified groups tracked in the Super League have been growing wealth as a share of revenues
Figure 13: Barring a tiny shortfall at Standard Chartered all wealth divisions turned a profit, with most growing
Figure 14: The modest improvements in cost ratios were driven by income growth outpacing costs
Figure 15: Cost reductions were a one-off in 2016 with increased business in 2017 spurring higher costs as well
Figure 16: Ratios only shifted modestly at most wealth management units