Overview of the Wealth Management Market
Elisabeth Dana
20 years: Wealth management & banking
Elisabeth outlines the wealth management landscape and the types of clients private banks and family offices cater to. She focuses on why wealth management is still limited to a small proportion of society and how this can be changed in the coming years with the advent of new wealth management technologies.
Elisabeth outlines the wealth management landscape and the types of clients private banks and family offices cater to. She focuses on why wealth management is still limited to a small proportion of society and how this can be changed in the coming years with the advent of new wealth management technologies.
Overview of the Wealth Management Market
7 mins 25 secs
Wealth management is the art of optimising the assets owned by private individuals. It is a holistic approach consisting of taking into consideration existing financial circumstances, family dynamics, individual financial goals and risk tolerance in order to devise the best possible short-, medium-, and long-term strategy to manage private individuals’ wealth.
Key learning objectives:
Define wealth management and what it has to do with you
Outline the size of the HNW financial services market and identify the incumbents
Outline the key concepts needed to be grasped in order to devise a wealth management strategy
What does the Wealth Management market look like today?
The global wealth management market is highly fragmented, a significant segment of the market is made up of small players. In 2019, the top 10 major players accounted for 11.9% of the market.
In the wake of the 2008 global financial crisis, like other areas of banking, wealth management was put under increased scrutiny and is now more heavily regulated. It also led to a shift in customer demand and focus. The last decade has seen an emergence of wealth-management tech, with customers seeking personalised products in the same way entertainment products, such as Amazon and Netflix are personalised to match our tastes.
The market for High Net Worth (HNW) financial services could be worth up to $30 trillion globally and is currently experiencing double digit annual growth. According to the 2020 Wealth X report, the combined net worth of the Ultra High Net Worth (UHNW) population has increased to $35.4 trillion.
How is Wealth Management most commonly divided?
It is most commonly divided into two areas: private banks and family offices. Single-family offices serve one individual and their family, while multi-family offices (or MFOs) serve a few families benefiting from economies of scale. Private Banks tend to service a much larger number of private clients than Family Offices and are more focused on the investment transactions than a holistic advisory approach. Private banks accounted for 41.8% of the wealth management market, making them the largest segment of wealth managers.
What does Wealth Management typically consist of?
Typically, wealth management has been built around managing the assets of High and Ultra-High Net Worth Individuals (HNWIs), Pension Funds, Insurance Companies and Sovereign Wealth Funds. However, with the advent of wealth-management tech aspiring High Net Worth Individuals are being taken into account. In this video, you will get an insight into wealth management knowledge which is beneficial to all. Indeed, whatever your interest in creating wealth, it has been proven that better knowledge in this department actually does result in you having more money.
Elisabeth Dana
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