Insight Report: Business Strategies for Targeting UHNWIs

Private banks and wealth management firms changed their business model following the 2008 financial crisis. Rather than focusing on the size of their business, private banks and wealth management firms have become more focused on specific client segments that yield the largest profits.

Ultra-high net worth individuals (UHNWIs) represent less than 1% of the global HNWI population, but account for around 33% of global HNWI wealth. UHNWIs offer wealth managers large-scale profitability due to the potential size of their investments. By acquiring UHNWI clients, wealth managers are able to provide a significant boost to assets under management, and build long-term profitable relationships.

When using wealth management services, UHNWIs often require a more sophisticated service than mass affluent consumers or core millionaires. It is becoming increasingly important for wealth managers and private bankers to build trust and brand loyalty with UHNWI clients, and to understand their needs.

Scope

The report covers the following areas:

• Attitudes of wealth mangers and private bankers to the future outlook for business strategy to target UHNWIs.

• A global snapshot of the UHNWI market, including market sizing and forecasts.

• Key trends and strategies in developed markets (the US, the UK, Germany, Switzerland, Canada and Australia), financial product and service offerings, the role of family offices in managing UHNWI wealth, and competitor strategy focus.

• Key trends and strategies in emerging markets (Brazil, Russia, India, China and South Africa), financial product and service offerings, the role of family offices in managing UHNWI wealth, and competitor strategy focus.

Key Highlights

• Smaller client segments such as UHNWIs yield higher returns than mass affluent consumers or core millionaires.

• The needs of UHNWIs in using wealth management and private banking services are complex.

• Overall, 48.1% of UHNWIs are entrepreneurs, followed by those who earned their wealth, or who run a family business.

• Traditional face-to-face services are likely to stay in the long term.

• UHNWI family business owners in emerging markets are increasingly opting for single-family offices.

• Targeting children has become a key strategy for wealth managers and private bankers.

Reasons to buy

• Understand the complex needs of UHNWIs and know how best to target them.

• Make robust business decisions and build better strategies in key areas such as expansion, client acquisition and management, and marketing to target UHNWIs effectively.

• Be informed about key market trends in financial product and service offerings in developed and emerging markets, and address each trend accordingly.

• Be aware of the attitudes of wealth managers and private bankers to the outlook for strategies to target UHNWIs.

Companies mentioned

RBC Wealth Management, Kotak Mahindra Private Banking, Water Street Family Offices, CAF Philanthropy Service, Family Bhive, TD Direct Investing, Hargreaves Lansdown, Alibaba, HSBC, Barclays, UBS, Coutts, Berenberg, WealthBar Financial Services Inc, Wealthfront Inc, Hengjiu Wealth Management, Tocqueville Asset Management, L.P, Tocqueville Trust Services, New York Private Trust Company, Emigrant Bancorp, Bank of America Merrill Lynch, Henderson Global Investments, Threadneedle Investments, Vontobel Asset Management, Lombard Odier Investment Management, Westfield, Stockland, Mirvac and Goodman, , Stonehage Group, Citigroup, Credit Suisse, Mischon de Reya, Mayfair Private, Opus Private, Thomas Miller Investment Ltd, Allianz SE, Brookfield Asset Management Inc, Prime Financial Group Ltd, The Goldman Sachs Group, Inc., AMG Wealth Partners, BNP Paribas, Julius Baer Group, Julius Baer Group, Ironbark Asset Management Pty Ltd, Bank of Queensland Ltd, Broadstone Wealth Management, Bank Muamalat Malaysia Berhad, China Pacific Insurance Co Ltd, Wilmington Capital Management, MPR Group, Yes Bank Limited, Clarfeld Financial Advisors Inc, iii-investments, WMPartners Wealth Management, Ardel Trust Company SA, Deutsche Asset Management (Australia) Ltd, Virgin Money, Lachlan Partners, HoyleCohen, Wells Fargo, State Street, Morgan Stanley Smith Barney, BNY Mellon, Bessemer Trust, Northern Trust, Deutsche Bank, AXA Wealth, JP Morgan, St James Places Wealth Management, Hargreaves Lansdown Asset Management, SunTrust Wealth Management, Robert W Baird & Co., Raymond James Private Wealth Management, JBWere Pty Ltd, Hillross Financial Services, Canaccord Genuity Wealth Management, Assante Wealth Management, HQ Trust GmbH, Bankhaus Lampe Private Banking, RWM Capital, Investec Private Bank, RWM Capital, ICICI Bank, HDFC Bank, Citibank, Standard Chartered Bank, Royal Bank of Scotland, Turim Family Offices and Investment Management, Third Rome Investment Solutions, Karvy Private Wealth, Janus Advisory Services, Julius Baer Group Ltd., Societe Generale SA, Aditya Birla financial Services Group, Nedbank Group ltd, Schroder Singapore Holdings Pvt Ltd

Table of Contents

1 Introduction

1.1 What is This Report About?

1.2 Definitions and Scope

2 Executive Summary

3 Attitudes of Wealth Managers and Private Bankers towards the Future Outlook of Business Strategies to target UHNWIs

4 Global Snapshot of the UHNWI Market

4.1 A Comparison of Business Strategies for Targeting UHNWIs in Developed and Emerging Markets

4.2 Market Size of UHNWI and Key Market Trends

4.3 UHNWI Demographic Trends

4.4 Drivers and Barriers of the UHNWI Market

4.4.1 Drivers

4.4.2 Barriers

5 Developed Markets

5.1 Financial Products and Services Offerings

5.1.1 The US

5.1.2 The UK

5.1.3 Germany

5.1.4 Switzerland

5.1.5 Canada

5.1.6 Australia

5.2 The Role of Family Offices: Managing Wealth of UHNWIs

5.3 Business Strategies for Targeting UHNWIs

5.3.1 Expansion strategy

5.3.2 Client strategy

5.3.3 Marketing strategy

5.4 Competitor Strategy Focus

5.4.1 Deep dive strategies of key market participants

6 Emerging Markets

6.1 Financial Products and Services Offerings

6.1.1 Brazil

6.1.2 Russia

6.1.3 India

6.1.4 China

6.1.5 South Africa

6.2 The Role of Family Offices: Managing Wealth of UHNWIs

6.3 Business Strategies for Targeting UHNWIs

6.3.1 Expansion strategy

6.3.2 Client strategy

6.3.3 Marketing strategy

6.4 Competitor Strategy Focus

6.4.1 Strategies adopted by key market participants

7 About WealthInsight

List of Tables

Table 1: HNWI Wealth Band and Group Definitions

Table 2: The Needs of UHNWIs in Private Banking and Wealth Management Services

Table 3: Competitive Benchmarking for Wealth Management Sector in Developed and Emerging Markets

Table 4: Ease of Doing Business Rankings for Developed and Emerging Markets, 2014

Table 5: Comparison of Key Parameters for the Wealth Management Sector in Developed and Emerging Markets

Table 6: Comparison of Business Strategies for Targeting UHNWIs in Developed and Emerging Markets

Table 7: Developed Markets – UHNWIs Market Size, 2009–2018

Table 8: Emerging Markets – UHNWIs Market Size, 2009–2018

Table 9: Top 10 Cities for Wealth Management, 2013

Table 10: Alternative Online Wealth Managers

Table 11: Developed Markets – Key Parameters for the Wealth Management Sector

Table 12: Developed Markets – Private Banks’ Private Equity Product Offering

Table 13: Alternative Online Wealth Managers

Table 14: Developed Markets – Major Deals in the Wealth Management Sector

Table 15: Developed Markets – Snapshot of Gender and Age Group Based Segmentation and Targeting Strategies

Table 16: Developed Markets – Use of Analytics by Wealth Management Companies

Table 17: Developed Markets – Family Office Product Offerings of Wealth Management firms

Table 18: Developed Markets – Wealth Management Workshops and Conferences by Companies

Table 19: Developed Markets – Wealth Management Services for UHNWI Entrepreneurs

Table 20: Developed Markets – Marketing Initiatives by Wealth Management Companies via Traditional Channels

Table 21: Developed Markets – Social Networking Platforms and Their Usage

Table 22: Developed Markets – Bank Hurdles For Customer Service

Table 23: Developed Markets – Wealth Management Competitive Landscape

Table 24: Developed Markets – List of Key Firms Operating in the Wealth Management Sector

Table 25: Developed Markets – Major Wealth Management Services to Target Family Business UHNWIs

Table 26: Emerging Markets – Key Parameters for the Wealth Management Sector

Table 27: Emerging Markets – Private Banks’ Real Estate and Private Equity Product Offering

Table 28: Russian UHNWIs – Alternative Asset Composition (%), 2009–2018

Table 29: Emerging Markets – Domestic Wealth Management Firms Offering Family Office Services

Table 30: Emerging Markets – Wealth Management Services for Family Businesses

Table 31: Emerging Markets – Key Deals in the Wealth Management Sector

Table 32: Emerging Markets – Smartphone and Tablet Applications

Table 33: Emerging Markets – Wealth Management Services for UHNWI Entrepreneurs

Table 34: Emerging Markets – Online Population Using Social Networking, 2012

Table 35: Emerging Markets – Social Media Marketing Initiatives by Banks

Table 36: Emerging Markets – Major Companies in the Wealth management Sector

List of Figures

Figure 1: UHNWI Population by Age Band in Key Developed and Emerging Markets, 2013

Figure 2: UHNWI Population by Gender in Key Developed and Emerging Markets, 2013

Figure 3: Developed Markets – UHNWI Asset Allocation

Figure 4: Alternate Asset Investment in Germany, 2009–2018

Figure 5: Emerging Markets – UHNWI Asset Allocation

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