Wealth Management Competitive Dynamics Report Overview
After 2021 saw double-digit growth in client assets and record profits, the private wealth management industry looks set for its toughest year since the global financial crisis. A combination of expansionary monetary policy and pandemic support created fertile market conditions for private wealth managers in 2021, but 2022 is set to be the polar opposite – saddling competitors with significant challenges and headwinds.
The wealth management competitive dynamics research report benchmarks the AUM and financial performance of the largest private wealth managers in the industry. The report will help you understand the challenges facing wealth managers and how the top banks are addressing them.
Wealth Management Competitive Dynamics - Wealth Managers by AUM
After a year of the COVID-19 pandemic, the world’s leading wealth managers had more than recovered from the stock market panic that wiped out trillions of dollars of wealth by the end of 2021. Client assets were up almost across the board, with many wealth managers smashing records for net inflows and total AUM by year-end 2021. All indicators were positive, but these rosy conditions proved to be short-lived. 2021 was likely a high point for the wealth management industry, which is looking at generally negative conditions for 2022-2023.
The total client AUM accounted for by our top wealth managers came in at $18.8 trillion in 2021. Continued industry consolidation is likely to force this figure even higher (after the effects of the COVID-19 crisis fall out of the stats).
Wealth Management Analysis by Growth in AUM and Share of HNW assets
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Wealth Management Competitive Dynamics - Financial Performance
More than 90% of wealth managers increased profitability in 2021 as economic conditions were particularly favorable in that year. The vaccine rollouts ramped up across parts of the world and sharply higher client AUM generated a bumper crop of fees. This was the primary driver in higher profitability; the natural cycle of financial markets always has the ability to boost wealth managers’ profit as it swings from a year of the crash to a year of recovery. Higher net inflows – typical in an improving economy – also contributed to the strong year.
Growth in profit was widespread across regions and types of private wealth managers. Some of the key players in the industry are Charles Schwab, Societe Generale, Santander, and Natwest, Goldman Sachs, among others.
Wealth Management Analysis by Profitability
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Wealth Management Competitive Dynamics - Competitive Trends
COVID-19 remains a strategic concern, but ESG is the long-term priority for the market. For most banks, this would be simply a matter of ensuring lending is not going to problematic companies and that the bank’s carbon footprint, governance, and policies are in line with common corporate standards.
Sustained high inflation is also sparking a repricing of investment assets and a shift in the strategy of the key players. Several factors, not least the Russia/Ukraine conflict, are pushing inflation measures up across the world. Wealth managers need to ensure their communications and strategies account for an era of prolonged elevated inflation.
Wealth Management Analysis by Top Theme in Focus
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Wealth Management Competitive Dynamics Overview
|Total Client AUM (in 2021)||$18.8 Trillion|
|Leading Companies||Charles Schwab, Societe Generale, Santander, Natwest, Goldman Sachs, and Others|
- Inflows to the largest wealth managers outpaced growth in overall HNW wealth in 2021.
- Digitalization of private wealth management is continuing to reduce headcount at leading banks, even as assets under management and clients reach all-time highs.
- COVID-19 has already faded from the strategies of the top wealth managers, with geopolitics and environmental, social, and governance rising as concerns.
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Reasons to Buy
- Benchmark the AUM and financial performance of the largest private wealth managers in the industry.
- Understand the challenges facing wealth managers and how the top banks are addressing them.
- Learn about the strategies driving growth at leading wealth management groups.
- Analyze wealth profitability trends and discover the strategies that leading banks are using to improve performance.
- Identify the industry’s best practices in managing operating costs and boosting revenues.
- Gain insight into the major issues preoccupying wealth managers.
Bank of America Merrill Lynch
Bank of China
Bank of Montreal
China Merchants Bank
Citi Private Bank
HSBC Private Bank
Royal Bank of Canada
Royal Bank of Scotland/NatWest
Bank of Singapore
St. James’s Place
Bank Cantonale Vaudoise
Rothschild & Co
Table of Contents
Table of Contents
1. Executive Summary
1.1 2022 is shaping up to be the year the tide went out
1.2 Key findings
1.3 Critical success factors
2. Wealth Managers by AUM
2.1 The top wealth managers recorded strong growth in 2021
2.2 Continued positive net new money boosted the top banks amid crises
2.3 The top end of the private wealth market saw key shifts
2.4 2022 half-year figures suggest the industry is struggling
3. Financial Performance
3.1 Profits at wealth management divisions recovered in 2021
3.2 Group performance bounced back to all-time highs in 2021
4. Competitive Trends
4.1 GlobalData’s Company Filings Analytics: top trends
4.2 High inflation returns, with big impacts on wealth and asset management
4.3 Private client digital lending solutions will pay off for wealth managers
4.4 The Russia/Ukraine conflict refocuses attention on compliance
5.1 Abbreviations and acronyms
5.2 Supplementary data
5.3 Secondary sources
5.4 Further reading
List of Tables
List of Tables
Table 1: Private banks with significant net inflows growth in 2021
Table 2: Published client AUM for the top 15 private wealth managers ($ billion), 2021-H1 2022
Table 3: Private wealth management minimum thresholds
Table 4: Net new money from reporting wealth management competitors ($ billion), 2016-21
List of Figures
List of Figures
Figure 1: Consolidation has been slowly reversing itself due to high HNW asset growth
Figure 2: Competitive pressure is building in the private wealth management market as economic storm clouds gather
Figure 3: Inflows surged in 2021 as the rich world rolled out COVID vaccines and opened up again
Figure 4: Raymond James led the pack in 2021 due to capital appreciation and net inflows
Figure 5: Wealth management profitability bounced back in 2021, aided by a recovery in the cost/revenue ratio
Figure 6: Growth in profit was widespread across regions and types of private wealth manager
Figure 7: Both costs and revenue surged in 2021 thanks to a reinvigorated industry
Figure 8: Wealth revenue growth was driven by fees generated from larger portfolios
Figure 9: Wealth FTEs have continued to fall across the top wealth management firms
Figure 10: The top wealth management banking groups have turned the corner on the pandemic
Figure 11: Only Credit Suisse and Quintet truly suffered a reversal in group profits in 2021
Figure 12: Several turnaround stories at troubled majors led the pack in group profit growth
Figure 13: Wealth management has not grown appreciably as a share of overall banking
Figure 14: The top wealth managers remain focused on ESG
Figure 15: ESG investment demand has shifted to the Middle East and Africa
Figure 16: Financial market decline is expected to materially affect industry performance in 2022
Figure 17: Demand for credit is highest in North America, where rates have already risen
Figure 18: Wealth managers will need to look beyond the West to find more HNW wealth to manage
Frequently Asked Questions
The total client AUM accounted for by our top wealth managers came in at $18.8 trillion in 2021.
More than 90% of wealth managers increased profitability in 2021 as economic conditions were particularly favorable in that year.
Strategic planning for COVID-19, inflation, and ESG are the key trends in the wealth management market.
Some of the key players in the wealth management industry are Charles Schwab, Societe Generale, Santander, Natwest, Goldman Sachs, and others.
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