Companies in the top half of Scorpio’s annual Private Banking Benchmark of the global wealth management industry “performed better than lower tier wealth management firms in terms of net new money, assets under management, income and pre-tax profit growth”, Scorpio, a London-based strategy and research firm, said, in a summary of its findings released this morning.
“However, large firms had higher expenses linked to increasing levels of global regulation and expansion into new markets.
“For these firms, expansion is a double-edged sword, fuelling growth on the one hand but also increasing expenditure, and exposing firms to the growing complexity of international regulation.”
But…
Those wealth managers that lack global reach had to contend with their own set of challenges last year, though.
“Their net new money flows more than halved, and margin pressure reduced overall levels of income,” Scorpio said.
“Many of these firms responded with cuts in order to maintain their profitability.
“The smaller Swiss private banks were particularly prone to these challenges. [At the same time,] they face the additional pressure of heightened global scrutiny on tax issues.”
In spite of their differering sets of challenges, Scorpio found that most of the world’s large and small wealth management firms navigated last year’s “complex economic and regulatory environment” successfully, with the result that they mostly reported solid growth in profitability.
“This suggests wealth managers are adapting to the structural changes taking places in the financial services industry, and the rapidly evolving economic and market conditions,” Scorpio said.
AUM ‘held firm’
As for assets under management, the world’s major private banks saw assets under management hold up fairly well in spite of the global financial problems that their wealth managers had to contend with last year, the Scorpio report shows. The average percentage change was up 0.61% from 2010 levels, which the Scorpio researchers said was a “solid result, given the onslaught of the Eurozone crisis, US deficit problems and sluggish growth in Asia in the latter half of the year”.
However, the researchers added, this means there was little movement among the top 20 firms in the AUM rankings (see table, below).
To read a summary of Scorpio’s findings on the Scorpio Partnership website, or to find out about purchasing the complete report, click here.
|
Rank
|
Institution
|
AUM ($bn)
|
Growth 2011
|
Reporting
currency |
Ranking move
|
|
1
|
Bank of America
|
1,671.00
|
-2.17%
|
USD
|
–
|
|
2
|
UBS
|
1,554.53
|
-0.34%
|
CHF
|
+1
|
|
3
|
Wells Fargo
|
1,300.00
|
-7.01%
|
USD
|
+1
|
|
4
|
Morgan Stanley
|
1,219.00
|
-0.81%
|
USD
|
-2
|
|
5
|
Credit Suissse
|
843.32
|
-2.51%
|
CHF
|
–
|
|
6
|
Royal Bank of Canada
|
573.32
|
-0.68%
|
CAD
|
–
|
|
7
|
HSBC
|
377.00
|
-3.33%
|
USD
|
–
|
|
8
|
Deutsche Bank
|
348.60
|
-5.41%
|
EUR
|
–
|
|
9
|
BNP Paribas
|
316.20
|
-7.11%
|
EUR
|
–
|
|
10
|
JP Morgan
|
291.00
|
2.46%
|
USD
|
–
|
|
11
|
Pictet
|
262.11
|
-5.48%
|
CHF
|
–
|
|
12
|
Goldman Sachs
|
227.00
|
-0.87%
|
USD
|
–
|
|
13
|
Citigroup
|
208.00
|
47.83%
|
USD
|
+7
|
|
14
|
ABN AMRO
|
189.98
|
-13.67%
|
EUR
|
-1
|
|
15
|
Barclays
|
182.71
|
-1.72%
|
GBP
|
-1
|
|
16
|
Julius Bär
|
178.79
|
0.12%
|
CHF
|
-1
|
|
17
|
Northrn Trust
|
173.70
|
12.50%
|
USD
|
+1
|
|
18
|
Bank of NY Mellon
|
168.00
|
1.20%
|
USD
|
-1
|
|
19
|
Crédit Agricole
|
163.67
|
-4.74%
|
EUR
|
-3
|
|
20
|
Lombard Odier Darier Hentsch
|
151.30
|
-1.18%
|
CHF
|
-1
|
Source: Scorpio Partnership
