2014 Private Banks and Wealth Managers survey Summary of results

Transcription

1 30 April Private Banks and Wealth Managers survey Summary of results Media partner: Intellidex (Pty) Ltd. All rights reserved Tel:

2 WHAT? Intellidex launched the Top Private Bank & Wealth Manager awards in 2012, based on an institutional questionnaire. In 2013 we added a survey of clients and the People s Choice award. This is the third edition, of what we believe is the only comprehensive public analysis of the industry. WHEN? The research phase was conducted between February and April The results were published in the Business Day Investors Monthly magazine on 30 April HOW? Intellidex, which conducts a range of different research across financial services in South Africa, designed two comprehensive questionnaires, one for private banks and wealth managers and another for their clients. WHY? A comprehensive survey provides important insight into the competitiveness of South Africa s private banks and wealth managers. The survey is structured in such a way so as to guide potential clients as to which institution is best placed to serve their individual needs. It also generates substantial statistical analysis that can be useful to firms looking to improve their products and services. WHO IS INTELLIDEX? Intellidex is a leading research house focused on South Africa s capital markets and financial services. We also undertake major research projects in stockbroking, retail banking, business banking and other areas. You can find out more at WANT TO KNOW MORE? The research process gathered substantial insight and information from clients. This includes demographic information and rankings from clients on their specific institutions on various aspects of service, products and costs, among others. We are able to provide detailed reports for private banks and wealth managers, with benchmarking against industry averages. If you are interested in such a detailed report, please contact Stuart Theobald, stheobald@intellidex.co.za, telephone GET READY FOR 2015 We will be undertaking the project again in the first half of Stay in touch with us through social media so you don t miss this and other information about research we undertake. Follow us on LinkedIn: Follow us on Follow us on Facebook: 2

3 CONTENTS Methodology of the Private Banks & Wealth Managers Survey... 4 INTRODUCTION... 6 Performance of specific wealth managers and private banks Winners per archetype People s choice Aggregate scores Overall respondent demographics Specific client needs for wealth management and private banking General feedback from clients on wealth management and private banking services List of issues interrogated through the client survey FIND OUT MORE GIVE US FEEDBACK

4 Methodology of the Private Banks & Wealth Managers Survey This survey was first undertaken in 2012 based on a questionnaire of institutions operating in the industry. In 2013 the client questionnaire was added. In each year, the results and analysis have been published in Business Day Investors Monthly, which is the media partner on the project. After each of the previous two exercises we have engaged extensively with the industry, taking their feedback on board. Below is an outline of the methodology as deployed in The survey has two components which should be looked at separately, each with its own questionnaire and information-gathering processes: 1: Private banks and wealth managers (institutional) questionnaire The assessment of institutions has two prongs: We asked private banks and wealth managers to complete a questionnaire. The questionnaire was compiled by Intellidex in the survey s inaugural year, 2012, and it gets revamped and updated every year after feedback from the market. It is a comprehensive questionnaire in which institutions need to go into detail to outline what services and products they can offer five typical client archetypes. We are particularly interested in the firms investment decision-making process and the products it would provide to clients, both from within and from other service providers. This year all but two institutions we approached provided us with completed questionnaires. In the case of the two firms which did not participate, we completed the questionnaires as best we could from public information. This ensures the process is comprehensive. We conduct our own research from all publicly available information on the firms, including reviews of the institutions websites, literature and other information, in order to audit the responses. 2: Client survey The client survey is conducted through an online questionnaire, compiled by Intellidex in 2013 and updated each year. This interrogates clients of private banks and wealth managers on their experiences with the firm, service standards and satisfaction levels. This year over clients began the survey with completing it, representing a good spread of the industry s members. Clients were incentivised with a R cash prize draw to be deposited in their private bank or wealth management accounts. This serves as a check that clients are genuine clients. Institutions are also encouraged to promote the client survey to their own clients. Anecdotally we believe about half the eligible institutions did so. We check the responses to ensure there are not automated completions from single IP addresses, or random completions, and check there are not unusual statistical patterns that would indicate manipulation. Assessment The assessment and scoring also have various aspects to it. First, Intellidex considers all the returned submissions from the private banks and wealth managers in conjunction with the reports from the assessment we carry out 4

5 ourselves from the public information available. Separately, we tabulate and summarise each competitor s scores from the client survey and use this in our analysis. This is also used to determine the winner of the People s Choice award for the firm that achieves the highest ranking from its clients. All the information from the firms, our research and the client survey is then consolidated into reports on each private bank or wealth manager, in preparation for assessment by our panel of judges. The panel consists of Intellidex chairman Stuart Theobald, analyst Warren Dick who been involved in the project since inception, and Orin Tambo, an Intellidex investment analyst. They assess all the firms in each of the five different archetypes as well as on the feedback from clients. Out of this we determine scores for each firm s ability to service the archetypes by average the scores each judge has given. Overall rankings The overall rankings are based on the sum of scores each institution scores for each archetype. This means that institutions who cater for a wide range of client types do better than those who specialise. For that reason, we consider the rankings per client archetype the more useful measure. These consolidate the judge s scores and rank the top three firms for each. The Peoples Choice winners are based purely on the feedback received through the client survey. To calculate scores, client responses to two questions were averaged, namely How do you rate your institution s overall service levels, and How likely are you to recommend your institution to friends and family. 5

6 INTRODUCTION This is our third assessment of SA s private banks and wealth managers. The results stem from a comprehensive questionnaire completed by the institutions and the feedback from clients via an online questionnaire. This year clients began the client survey with completing it. We consider the sample size to be a meaningful reflection of the views of the universe of clients of South African private banks and wealth managers. In this report we provide the results as well as some additional insights that stem from the survey. 6

7 Performance of specific wealth managers and private banks The following were named as the winners in the Business Day Investors Monthly report published on 30 April Winners per archetype These results reflect the judges points, based primarily on an assessment of institution s questionnaires and a consideration of the public source study and client responses. 1 Passive lump-sum investor Rank Private Banks Score (out of 5) 1 Standard Bank Private Clients Nedbank Private Wealth Absa Private Bank & Wealth 3.67 Wealth Managers Score (out of 5) 1 Galileo Capital 4.17 =1 Sanlam Private Investments Citadel 4.00 =3 PSG Up-and-coming professional Rank Private Banks Score (out of 5) 1 Nedbank Private Wealth Standard Bank Private Clients FNB Private Clients 3.75 Wealth Managers Score (out of 5) 1 Sanlam Private Investments Galileo Capital PSG

8 3 Successful entrepreneur Rank Private Banks Score (out of 5) 1 Standard Bank Private Clients Nedbank Private Wealth RMB Private Bank 4.00 Wealth Managers Score (out of 5) 1 PSG Sanlam Private Investments Stonehage Wealthy executive Rank Private Banks Score (out of 5) 1 Absa Private Bank & Wealth Standard Bank Private Clients Investec 4.00 Wealth Managers Score (out of 5) 1 Maitland Melville Douglas Stonehage Internationally wealthy family Rank Private Banks Score (out of 5) 1 Absa Private Bank & Wealth Investec Standard Bank Private Clients 4.00 Wealth Managers Score (out of 5) 1 Stonehage Maitland Melville Douglas

9 Consolidated score (out of 5) Likelihood of referral (out of 5) Overall satisfaction level (out of 5) Consolidated score (out of 5) Likelihood of referral (out of 5) Overall satisfaction level (out of 5) Private Banks & Wealth Managers Survey People s choice This was based purely on the feedback received through the client survey. Top Private Banks Rank 1 Investec FNB Private Clients Standard Bank Top Wealth Managers Rank 1 Galileo Capital Brantam Citadel

10 Total Internationally wealthy family Wealthy executive Successful entrepreneur Up-and-coming professional Lump-sum investor Rank Private Banks & Wealth Managers Survey Aggregate scores These results informed the overall scores given to each private bank and wealth manager by the judging panel. Private banks Out of 5 25 Standard Bank Nedbank Private Wealth Absa Private Bank/Absa Wealth & Investment Management Investec FNB Private Clients/RMB Private Bank* Wealth managers Out of 5 25 Sanlam Private Investments PSG Konsult Stonehage Maitland Citadel Mellville Douglas Galileo Capital Brantam Financial Services * Equally weighted results for FNB Private Clients and RMB Private Bank Intellidex provided 300-word descriptions of each institution and a motivation for the scores that was published by Business Day Investors Monthly. 10

11 Overall respondent demographics The following graphs show the overall aggregate results from the client survey. i. Age 75 or older 6% 65 to to 64 26% 26% 45 to 54 17% 35 to 44 13% 25 to 34 11% 18 to 24 1% 0% 5% 10% 15% 20% 25% 30% ii. Annual gross income >R4m R3m to R4M 2% 3% R2m to R3m 6% R1m to R2m 23% R500,000 to R1m 29% <R500,000 37% 0% 5% 10% 15% 20% 25% 30% 35% 40% 11

12 iii. Educational qualifications iv. Gender 34% 20% 24% 17% 76% 30% Matric Undergraduate degree Female Male Postgraduate degree Professional qualification iv. Assets under management >R30m 8% R10m - R30m 19% R3m - R10m 31% R1m - R3m 21% R R1m 8% < R % 0% 5% 10% 15% 20% 25% 30% 35% 12

13 4. Specific client needs for wealth management and private banking Question: Which of the following best describes the financial needs that your private bank/wealth manager fulfils? i. General client archetypes other 26% internationally wealthy family 3% wealthy executive 11% succesful entrepreneur 21% up-and-coming professional lump-sum investor 19% 20% 0% 5% 10% 15% 20% 25% 30% Question: Would you say that your private bank/wealth manager specialises in clients who have the needs you have outlined above? (Score 5 for "yes, very" and 1 for "no, not at all") ii. Clients perception of the ability of service providers in meeting their specific needs 5, yes, very 64% 4 21% 3 9% 2 1, no, not at all 3% 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 13

14 Question: Do you need to use another institution for certain services that yours does not provide? iii. Adequacy of primary service provider in meeting key needs 31% 69% Yes No 5. General feedback from clients on wealth management and private banking services i. Duration of relationship 20 years or more 11% < 20 years 22% < 10 years 26% < 5 years 18% < 3 years 16% < 1 year 8% 0% 5% 10% 15% 20% 25% 30% 14

15 Question: If you are you multi-banked, please provide reasons why (you may select more than one). iii. Reasons why clients are multi-banked N/A 57% I prefer to diversify my bank exposure 19% I have legacy products from a previous banking relationship My primary bank wasn t competitive on price on all products My primary bank didn t have all the products I required My primary bank didn t have all the skills I required 9% 10% 7% 8% 0% 5% 10%15%20%25%30%35%40%45%50%55%60%65% v. Services used by clients Insurance products 15% General advice on managing your wealth 60% Investment products by private bank directly 22% Investment products by independent fund managers 48% Share/derivatives trading 35% Structured finance products Corporate banking 8% 11% Fiduciary services Loan products Savings products 23% 24% 29% Transactional banking 46% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 15

16 Question: For all of the services you use, please rate the quality of service you receive where 1 is very poor and 5 is excellent (leave blank if you do not use the service). vi. Rating of quality of service received by clients. Rate (1 is very poor - 5 is excellent) Transactional banking (cheque books, credit cards, current accounts) Savings products (cash-based savings like fixed or notice accounts) Loan products (home loans and vehicle loans) Fiduciary services (trust structuring) and estate planning (wills, etc) Corporate banking and other services for your company 2% 3% 12% 30% 53% 5% 5% 5% 5% 5% 5% 4% 16% 25% 50% 6% 3% 11% 26% 54% 10% 6% 19% 27% 39% Structured finance products like equity derivatives or foreign exchange structures 10% 4% 10% 22% 53% Share/derivatives trading 3% 2% 9% 29% 57% Investment products (such as unit trusts or retirement annuities) provided by independent fund managers 3% 2% 7% 26% 62% Investment products (such as unit trusts or retirement annuities) provided by your 6% 4% 10% 24% 57% private bank directly General advice on managing your wealth 3% 3% 8% 23% 63% Insurance products such as life insurance and/or short term insurance 9% 5% 13% 26% 48% vii. We asked clients to rank what factors were most important in choosing a private bank. In percentage terms, clients rated these factors in order of importance. Rank (importance) The quality of service I receive 32.33% 11.46% 5.05% 9.03% 42.14% The prestige/exclusivity I get dealing with my bank 19.90% 12.82% 17.18% 24.95% 25.15% The competitive pricing of my bank relative to the market 12.43% 16.60% 32.14% 20.78% 18.06% The excellent advice I feel I get 23.59% 14.08% 13.88% 16.12% 32.33% The fringe benefits (like airline lounge access or air miles/loyalty points) 29.13% 9.51% 14.76% 14.85% 31.75% 16

17 Question: How do you rate the overall service levels you receive from your primary private bank or wealth manager? (On a scale of 1 to 5, with 5 being excellent.) viii. Perception of overall service levels in the market 5, excellent 60% 4 28% 3 7% 2 4% 1, very poor 2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% ix. Do you feel you are getting good value for money for the fees you are charged? 5, very much so 39% 4 33% 3 21% 2 5% 1, not at all 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 17

18 Question: do you think the returns you are getting on your investments are...: x. Perception of investments returns relative to the market 22% 31% 4% 44% In line with market average Below market average Better than market average I don't know/unsure ix. Likelihood of recommending services of current provider to family or friends 5, highly likely 69% 4 17% 3 8% 2 3% 1, not at all 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 18

19 xii. In thinking about your most recent interaction with your private bank or wealth manager, would you say it was a positive experience in terms of how your needs were met and the professionalism of the interactions? 5, very much so 65% 4 21% 3 8% 2 1, not at all 2% 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 6. List of issues interrogated through the client survey We are able to provide analysis of client feedback on each institution to clients. The following is a list of the questions asked that indicates the information we gathered. Note that in the case of some institutions, insufficient numbers of clients completed the questionnaire for the data to be meaningful. 1. Demographics a. Age b. Gender c. Highest educational qualification d. Marital status e. City/town f. Annual income before deductions 2. Private bank/wealth manager relationship features a. Client archetype b. Perceived level of specialisation of institution for client type c. Perception of whether institution could improve offering for specific needs d. Whether client uses other institutions beyond main one 3. Service provider a. Which private bank or wealth manager is used b. Length of client relationship c. Whether planning to change primary private bank or wealth manager in the next few years d. Why client would change e. Which institutions are used apart from primary one f. Reasons if client is multi-banked g. Total value of assets that private bank advises/manages on client behalf 4. Assessment of services used a. Which services and products are used (from list of 11) 19

20 b. Rating of quality of service for each service/product used c. Whether private bank/wealth manager has discretion in managing assets 5. Overall service and fees a. What factors were important in choosing private bank/wealth manager b. Rating of overall service levels c. Ease of client understanding of fees d. Whether performance fees are charged e. Perception of whether investment returns are above/below the market f. Rating of value for money g. Likelihood of recommending to friends or family 6. Institution/client communication a. Whether single or multiple points of contact b. Turnover of primary relationship managers c. Frequency of face-to-face meetings with representatives d. Frequency of electronic interaction with representatives e. In the case of most recent interaction, rating of experience 7. Freeform comments on experiences with the institution FIND OUT MORE Intellidex produces detailed reports on the performance of individual private banks and wealth managers based on the client feedback we have collected. If you would like to commission such a report, please contact Stuart Theobald, stheobald@intellidex.co.za or tel GIVE US FEEDBACK We would like to know what you think of the Private Banks & Wealth Managers survey process. If you have any thoughts or feedback, please topprivatebanks@intellidex.co.za Follow us on LinkedIn: Follow us on Follow us on Facebook: 20