Best Practice in Wealth Management Asia Pacific

Transcription

1 A Datamonitor report Best Practice in Wealth Management Asia Pacific Published: May-05 Product Code: Providing you with: Analysis of best practice in wealth management around the globe, with a focus on the Asia Pacific region Competitors covered in this report include Merrill Lynch, HSBC, Barclays, Coutts, Citigroup, St. George, DBS, UOB, OCBC, Sand Aire and Credit Suisse Primary research sources include private banks and wealth managers Use this report to Find out how your competitors are presenting themselves to the market and leveraging distribution and information channels Secondary research sources include central banks, census and statistics departments and Internet research

2 Best Practice in Wealth Management Asia Pacific An introduction to the report Best Practice in Wealth Management Asia Pacific examines best practice exhibited by wealth managers around the globe in areas such as geographic expansion, customer focus, differentiation and segmentation. Case studies are analyzed and recommendations are made for competitors. This report starts off by answering the question "Why do wealth managers need to strive towards best practice?" and "What are the measures of best practice?" It then goes on to analyze best practice from three separate perspectives: customer orientation, expansion and use of service channel. Key findings and highlights In each section the report analyzes a series of case studies highlighting both good and bad practice taken from private banks and wealth managers around the globe and then draws together conclusions. Through each chapter, key points are picked out and action points are given for private banks looking to apply best practice. Citigroup is ensuring that it is always at the forefront of the client s thoughts on investing. Indeed, by targeting the children of wealthy clients, the bank is likely to be the first point of contact when the time comes to take financial responsibility. In many cases competitors stand out more because of the deficiencies of the market than through being particularly innovative or far-reaching. In an industry that is built on elevated service levels this is a sad prognosis. What makes Coutts segmentation strategy so robust is that the bank has chosen to take many different factors into account in breaking the client base down. It is difficult and costly to split down a client base at all, so doing things in this way makes Coutts an example of best practice in segmentation. Reasons to buy For marketing managers: Find out how your competitors are presenting themselves to the market and leveraging distribution and information channels For strategy managers: Benchmark yourself against your competitors through analysis of their initiatives For private banking directors: Find out what is best practice in client centricity and what your competitors are doing to get ahead Contact us... From Europe: tel: fax: [email protected] From Germany: tel: fax: [email protected] From the US: tel: fax: [email protected] From Asia Pacific: tel: fax: [email protected]

3 Sample pages from the report Expansion According to UBS, the UK and Germany have continued to perform particularly well and the wealth manager believes the reason it continues to attract money is because of its quality product offering and client advisory process. The business is currently running at a gross margin of around 70 basis points, but there is an indication that in the medium term, this can be increased to 95 basis points. The wealth manager has also highlighted that the net margin will always be slightly lower than the international business due to the additional costs of structuring tax wrappers/life wrappers for Customer the individual orientation markets in order to fulfill the differing regulatory and legal requirements. Expansion outside of Europe Landowners As an owner of land or property, you may be interested in The wealth management giant s expansionist exploring aspirations ways have of diversifying not been confined your business to in order to maintain your lifestyle Europe, with Asia and Latin America also now, on the but still radar. be Indeed able to UBS pass has on your been family s assets to future generations. At spotting opportunities in all of the markets Coutts, it considers we want to to have ensure significant that we growth can provide the best solutions for you. potential; Inpatriates If you are resident but are not domiciled in the UK, you can face a June 2004 UBS applied for a license bewildering to operate out array of of Beijing financial on the options back and of decisions. Our team of private bankers the significant growth the Chinese market is has dedicated seen in to, recent and years; experienced in, looking after international clients living and working in the UK. Whether you re a business owner, a professional working for a October 2004 UBS announced its intentions major international to re-enter the organization, Japanese a market, Use sports of person service or an channel entertainer, and have UK just one month after Citigroup Private resident Bank had status, its we private understand banking the license unique financial implications for you and your revoked by the Japanese Financial Services family. Authority; December 2004 UBS acquired Dresdner Retired Bank s More Latin than American anyone, private you client know that of early tripling planning its premier for retirement banking pays customer base and doubling its assets under business, Dresdner Bank Lateinamerika. dividends. This acquisition But you gives also know UBS that additional does not management. stop there. Whether you are just offices in Hamburg and Miami and allows getting it to capture close to significant retirement assets or already of South enjoying more time at leisure, you ll want to American individuals; ensure that your financial plans are robust According and that they to the can bank, be flexible these during clients represent just 1% of their client base but your retirement. We are ideally placed to contribute help you control 10% to your the consumer financial future banking division s net profit. OCBC is keen for this January 2005 UBS signed a landmark whilst maintaining JV China a high with quality China s of life State for you profit and contribution your family. to increase to 20-25% over the next three years. Development Investment Corporation (SIDC). UBS and SIDC intend to use China Dragon s existing platform to launch International new mutual As funds well and as being to pursue the UK s Currently leading private OCBC bank, has four throughout dedicatedour premier banking centers in Singapore, more than discretionary investment mandates as and history when we regulations have looked permit. after clients who are its either domestic non-resident rivals DBS or and non-domiciled UOB. Opening another four branches will mean the bank in the UK, or who are UK citizens living and has working the largest abroad. network in Singapore of any bank excluding Maybank Maybank has 11 Priority Banking branches. The verdict In segmenting its client base in this way, Coutts has clearly taken a detailed look at This type of expansion is extremely aggressive the makeup and there of its are client very base few organizations and chosen an In appropriate addition to its strategy. Singaporean Datamonitor presence, OCBC Premier Banking is available in that could afford acquisition of this scale. analysis However, of segmentation this characteristic for private does banks Malaysia not yielded five through separate OCBC segmentation Malaysia, which has 11 premier banking centers. preclude UBS from a best practice study. strategies: Indeed there are several factors that ensure UBS global expansion gets a mention. Competition has been a driver of innovation Source of wealth One of the primary reasons for the focus on the premier branch in Singapore, has been competition in the market from both local and foreign banks. Best Practice in Wealth Management Asia-Pacific Sophistication Datamonitor (Published 05/2005) Page 59 This report is a licensed product and is not to be photocopied Geographic situation Lifestage Customer value Coutts has used a combination of these strategies in segmenting its clients, taking Table 3: Premier banking branches in Singapore into account source and type of wealth, lifestyle and personal situation. The thinking As mentioned previously, five of the six foreign qualified full banks have premier banking services on offer in Singapore. This means there are a total of eight premier services on offer to the affluent residents of Singapore. Service Premier banking centres Maybank Priority Banking 11 Best Practice in Wealth Management Asia-Pacific CitiGold Wealth Management 6 Datamonitor (Published 05/2005) Page 38 UOB Privilege Banking This report is a licensed product and is not to be photocopied OCBC Priority Banking 5 4 HSBC Premier 4 ABN AMRO Van Gogh Preferred Banking 4 DBS Treasures Priority Banking 3 Standard Chartered Priority Banking 2 Source: Datamonitor, Banks listed D A T A M O N I T O R Best Practice in Wealth Management Asia-Pacific Datamonitor (Published 05/2005) Page 71 This report is a licensed product and is not to be photocopied Request more sample pages...for FREE! From Europe: tel: fax: [email protected] From Germany: tel: fax: [email protected] From the US: tel: fax: [email protected] From Asia Pacific: tel: fax: [email protected]

4 Best Practice in Wealth Management Asia Pacific Table of contents EXECUTIVE SUMMARY INTRODUCTION Who is the target reader? How to use this report Report Methodology SETTING THE SCENE Why is best practice important? - The increasing focus on best practice - The opacity of the market makes best practice difficult to determine - Despite this wealth managers still strive for industry excellence How can best practice be measured? - The basic measures of success - The key qualifying criterion for best practice CUSTOMER ORIENTATION Customer involvement - Citigoup has been investing in relationships The co-investment concept has been offered by CPB to its clients Targeted seminars are also offered to selected client groups Citibank NRI is sponsoring key events - ICICI has been focusing on domestic clients ICICI's regional seminar circuit Service focus - Sand Aire keeping it in the family Customer segmentation - Coutts' multi-criteria segmentation strategy How does this compare to other offerings? Data EXPANSION Domestic expansion - Coutts has looked to the provinces for clientele 2003 marked the turnaround in strategy......and the West Midlands was the first area to be expanded......followed by the North-West...then Cumbria in the North-East and Oxford in has already seen growth in the South-East and North East The fruits of expansion And what about the future? - Barclays takes on the UK market Organizational structure was a hindrance The first move was to make an acquisition Then came the restructure International expansion - UBS taking over the world Starting with organic European growth Then European acquisition The results in Europe Reflecting on success Expansion outside of Europe - DBS has become a regional private banking force The Hong Kong/Singapore advantage Scoping out opportunities Leveraging group resources Partnerships Verdict USE OF SERVICE CHANNEL Branch-based services - The Singaporean domestic banks have recognized the power of premier branches UOB was a slow starter DBS is gaining ground And OCBC is ambitious Competition has been a driver of innovation Singapore is ahead of other countries Technology propositions - Credit Suisse Private Bank's cutting edge technology It's all about enabling your clients What about the future? How does this compare to other offerings? Direct interaction - St. George has shown progressiveness in front line service Through use of relationship teams By switching from fees to commission And by reviewing staff remuneration...often in the case of customer centricity, competitors stand out more because of the deficiencies of the market than through being particularly innovative or far-reaching. In an industry that is built on elevated service levels this is a sad prognosis... Alan Shields, Datamonitor Analyst

5 APPENDIX Definitions - AAGR - CAGR - Gini index - Liquid assets - Liquid asset bands Research methodology The Global Wealth Model - The UK sub model - Asia-Pacific sub model - Forecasting methodology - Datamonitor's wealth numbers compared with others' numbers Bespoke Wealth Market Sizing Further reading - Datamonitor Asia-Pacific Wealth Reports - Datamonitor Asia-Pacific Insight Reports Asia-Pacific contacts Figure 9: UBS' acquisition strategy over the last two years has seen a significant inflow of client assets for its European Wealth Management business Figure 10: Almost every international private client brand has a presence in Hong Kong and Singapore Figure 11: UOB's Wealth Management Centres have lounge style seating and private meeting rooms Figure 12: Singapore is one of the most competitive premier markets in the world, with just 19,000 potential clients per competitive offering Figure 13: Credit Suisse's wealth management business model Figure 14: Credit Suisse Private Banking Website Figure 15: Credit Suisse Private Bank has improved revenues and profits since the market downturn, but it is far from being the best performing wealth manager Figure 16: There are several different ways in which wealth managers are choosing to manage their clients TABLES Table 1: Table 2: Table 3: Table 4: The motivations for setting up a family office differ greatly by family office model Key indicators of success for the global private banks Premier banking branches in Singapore Wealth markets that have been modeled using the Global Wealth Model FIGURES Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Methodology diagram and report structure Compared to its peers, Citigroup Private Bank has performed well over the last few years, both in client acquisition and revenue growth Citigroup Private Bank's regional advertising highlights commitment to relationships in the Asia-Pacific region Coutts segmentation strategy allows the bank to cater for almost any client Coutts' regional office network in England and Wales The problems facing Barclays were of disparity and service gaps The Barclays model is now much more comprehensive and allows for the easy feed-through of clients UBS Wealth Management offices in Europe, March The example that St. George sets is certainly one that other players both in Australia and in other countries can seek to emulate. In particular, the move away from commissions is something that Datamonitor would encourage other private banking institutions to consider... Alan Shields, Datamonitor Analyst

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7 Best Practice in Wealth Management Asia Pacific Wealth Management in Asia Pacific The most dynamic financial services sector in the strongest growth market in the world. In the second half of 2004, the poor equity performance of seems to be receding from the minds of many in the wealth management market, none more so than wealth managers who have managed to cut costs and are now reporting much more positive results. Interested in this topic? Changes in levels and distribution of wealth, market consolidation and new ventures, regulatory pressure and government initiatives, product development and changing distribution channels are combining to fundamentally reshape the savings and investments environment Other reports available in this series Customer Segmentation in Singaporean Private Banking As Singaporean private banks and wealth managers look to extract maximum value from their existing clients, while maintaining an acceptable level of customer satisfaction, this report looks at the options for segmentation and the benefits it brings Published: Apr-05 Product code: DMFS1780 Customer Segmentation in Australian Private Banking As Australian private banks and wealth managers look to extract maximum value from their existing clients, while maintaining an acceptable level of customer satisfaction, this report looks at the options for segmentation and the benefits it brings Published: Mar-05 Product code: DMFS1772 Global Wealth Predictions 2005 Provides Datamonitor's definitive view on the direction of the global wealth management market for the year ahead Published: Jan-05 Product code: BFFS0360 Targeting business owners in Asia Pacific Wealth Management Focuses on the Australia, Hong Kong, Singapore and Korea and identifies which offers the largest opportunities for wealth managers. Innovative and stand-out competitors are detailed along with action points for wealth managers and SME banks Published: Dec-04 Product code: BFFS0334 For more information on reports and briefs go to: Subscribe to Monitor A monthly update of Datamonitor's new products, delivered to you by . [email protected]

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