By David Maude
Wealth administration is likely one of the components during which banks and different own monetary prone gamers are making an investment seriously. however the marketplace is altering quick. Going ahead, gamers consequently have to adapt their thoughts to the hot realities: what labored some time past won't, for the main half, be acceptable sooner or later. This distinctive ebook, written by means of a former McKinsey advisor, deals an up to date, certain, sensible figuring out of this interesting zone of economic companies
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Content material: bankruptcy 1 advent (pages 1–9): bankruptcy 2 determination idea (pages 11–66): bankruptcy three Behavioural Biases (pages 67–104): bankruptcy four probability Profiling (pages 105–134): bankruptcy five Product layout (pages 135–155): bankruptcy 6 Dynamic Asset Allocation (pages 157–185): bankruptcy 7 lifestyles Cycle making plans (pages 187–206): bankruptcy eight based Wealth administration procedure (pages 207–227): bankruptcy nine end and Outlook (pages 229–230):
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Additional resources for Global Private Banking and Wealth Management: The New Realities
17). 17 2. High profitability. This reflects two factors. First, net profit margins are relatively high. Most wealth management players achieve 25 basis points or more, compared to around 5 basis points for instititional asset managment (though institutional earnings are argually even more sticky). Second, regulatory and economic capital requirements are low, linked to very little credit and market risk and a limited need for an extensive branch network. 19). 3. Stable revenue stream. This reflects a high proportion of fees in the revenue mix, in contrast to more volatile net interest or trading income.
Within aggregate economic growth, its balance/composition, volatility and the pattern of productivity growth also have an impact on wealth creation and allocation. 11 shows that growth in global wealth has exceeded that of global GDP in recent years. Asia Pacific and Latin America stand out as having grown wealth well in excess of their GDP growth rates, while the opposite has been the case in the Middle East. Latin America also accounts for a disproportionately high share of global wealth relative to its share of global GDP; on the other hand, Europe’s wealth share is disproportionately low.
26). Revenue margins tend to be lower for wealthier clients, linked to their greater bargaining power, financial sophistication, more product/deal-driven approach and price sensitivity. 23 Wealth management economies of scale: European survey Source: McKinsey European Private Banking Economics Survey 2004. Reproduced by permission. number of low-growth small accounts can offset any revenue advantage, and many of the very wealthiest clients can also be very expensive to serve. Sitting between these extremes, there is a ‘sweet spot’, which may be client asset levels of around $1 million– $5 million.