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Opalesque Industry Update - Scorpio Partnership's latest edition of the highly anticipated Global Private Banking Benchmark shows a tale of two halves for the global wealth industry. The leading assessment of KPIs in wealth management highlighted that private banks successfully navigated regulatory and political upheaval in 2016, with assets under management rising by almost 41% on average. The results, based on the publicly available information provided by over 200 wealth institutions, indicate that cost income ratio also fell below 80% for the first time since 2012, reflecting wealth managers concerted efforts to cut costs despite continued compliance pressures. Strong profitability growth masked the industry's underlying struggle to improve revenues, with operating income rising just 0.04% on average. "As advanced technologies continue to reshape the wealth management industry, firms will be able to recognize cost savings through process optimization," said Caroline Burkard, Director at Scorpio Partnership. "The challenge going forward will be managing the revenue side of the profits equation. These firms are experiencing pricing pressure, driven by regulations, the trend for passive investing and the wave of lower-fee competitor models entering the market. Solving the equation will require increased focus on enhancing the proposition with advisory capabilities and improvements to the client experience," she added. This year the largest 25 firms in the Benchmark managed $13.3tln of HNW AUM, representing a 63.2% market share. Of the top ten operators, seven had a North American focus. However, Asia's private banks gained momentum in 2016. China Merchants Bank stands out int he ranking, having added over CNY400bn to AUM in 2016 as a result of enhanced customer acquisition efforts, as well as upgrading its private banking proposition. Another contender from Asia, Bank of China, entered the ranking this year, managing over CNY1tln on behalf of its wealth management and private banking customers. By contrast, many of Europe's key operators experienced negative AUM growth due to a combination of internal restructuring initiatives, decisions to scale back from non-core marekts and reputational challenges. To access table and full press release, please click Article source - Opalesque is not responsible for the content of external internet sites |
Industry Updates
Wealth industry boosts AUM and brings cost under control
Tuesday, August 08, 2017
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