WEALTH INDUSTRY KPIs SOLID BUT TAPER FROM PREVIOUS YEAR SURGE;
TOP 10 DOMINATE MARKET SHARE AS DUO PASS USD2trn AUM HURDLE.
LONDON – The global wealth management industry had a solid business year in 2014 in terms of financial results for the operating model. In spite of financial market uncertainties and currency volatility most lead players experienced overall growth in client volumes. However, the latest KPI growth rates came off the higher ratios in the previous reporting year. The financial year also heralded a landmark breakthrough for two operators – UBS and Morgan Stanley – as their assets under management (AUM) figures surged beyond USD2 trillion (Figure 1).
According to The Global Private Banking Benchmark 2015 released today from Scorpio Partnership, AUM for the over 200 industry players annually assessed moved upward by an average 3.4% and operating profits also improved by an average of 3.3%. However, these solid figures are tempered by continued pressure on the operating efficiency measured by cost-income ratios. In the latest report the industry average rose 90 basis points to 84.4% (Figure 2).
“This is a complex moment in the history of our industry. The operating model is facing major growing pains to accomodate the expectations of financial groups for wealth management divisions to deliver sustained high margin results. The good news is client volumes and demand for wealth services are strengthening for many. But the bad news is the industry is still tackling major compression factors in terms of costs versus income. Some are not moving quickly enough with rates of growth slowing,” said Sebastian Dovey, managing partner of Scorpio Partnership....MUCH MORE
Figure 1: Top 25 private banks worldwide by assets under management (AUM)
Source: Scorpio Partnership.HT: Barron's Penta:
The world’s 209 largest private banks collectively managed $20.6 trillion in assets, in 2014, for wealthy clients, up a ho-hum 3.4%, according to London-based industry tracker Scorpio Partnership. But don’t underestimate the drama that was lurking underneath those boring headline figures – a few of the losers were humbled by scandal, winners made acquisitions to pole vault up the ranking....MORE