Shifts in the UK Wealth Management Landscape

Overview 1
Catalyst 1
Summary 1
Methodology 1
Executive Summary 2
Large players have lost ground to their smaller competitors, and there is plenty for them to be worried about going forward 2
In the wake of the crisis, HNWs are wanting more banker contact and less mistakes 2
Larger wealth managers need to address the overloading of relationship managers, while smaller wealth managers need to exploit the window of opportunity 2
Table of Contents 3
Table of figures 4
Table of tables 5
COMPETITIVE CHANGES IN THE UK WEALTH MANAGEMENT MARKET 6
The largest players in the UK wealth management market have been severely tested and the rankings are changing 6
The total assets under management by the top 25 providers fell in 2008 6
For many wealth managers, the changes in AUM and total clients in 2008 went in opposite directions 8
The total number of staff has swollen and contracted in line with the movements of AUM 9
The larger players have lost ground to their smaller competitors, and there is plenty for them to be worried about going forward 11
Large wealth managers were soundly beaten in 2008 by the medium and small-sized players 11
Fundamental weaknesses around perceived financial stability, brand and personal relationships are contributing to the larger wealth managers' problems 12
The larger wealth managers appear to be overloading their relationship managers with clients 14
The relative overloading of relationship managers within larger wealth manager is not likely to ease in the near future 15
CUSTOMER CHANGES IN THE UK WEALTH MANAGEMENT MARKET 16
In the wake of the crisis, HNWs are wanting more banker contact and less mistakes 16
There is a large group of HNWs wanting to profit from recovery 16
Not making errors is seen as being key in retaining HNW clients 18
Increased face-to-face contact is the key to increasing share of wallet 19
STRATEGIC RECOMMENDATIONS FOR UK WEALTH MANAGERS 21
Larger wealth managers need to address the overloading of relationship managers and work on quality, while smaller wealth managers need to exploit this window of opportunity 21
Key action one: avoid cutting support staff-do not underestimate their importance 23
Key action two: Recruit good relationship managers and get client loading ratios to an acceptable level 23
Key action three: Assess damage to brands, images and reputations and seek to rectify problems 28
APPENDIX 29
Methodology 29
Private Asset Managers (PAM) 2009 29
Wealth Management Market Leaders Survey 2009 29
Bibliography 29
Further reading 29
Ask the analys 29
Datamonitor consulting 30
Disclaimer 30
List of Tables
Table 1: AUM within UK wealth managers in 2007 and 2008 7
Table 2: Changes in AUM and total clients in 2008 9
Table 3: Changes in total staff and relationship manager compared with AUM growth 10
Table 4: Changes in 2008 AUM, client base and discretionary/advisory split 12
Table 5: What will determine HNWs' choice of wealth management service over the next two years? 14
Table 6: Relationship managers within large providers do appear to be stretched compared with those in smaller providers 15
Table 7: In 2008, small and medium-sized players were strong recruiters 15
Table 8: What are HNWs demanding today? 17
Table 9: What is the best way to retain clients today? 19
Table 10: What is the most effective means of increasing share of wallet today? 20
Table 11: Large wealth managers would have to vastly increase the number of relationship managers to reach the client loading factors of the smaller players 23
Table 12: Large wealth managers would have to vastly increase their numbers of relationship managers to reach the loading factors of the smaller players 25
List of Figures
Figure 1: UK HNWs are most influenced by personal relationships in their choice of wealth manager 13
Figure 2: UK HNWs are looking to ways to profit in the current environment 17
Figure 3: The best way for wealth managers in the UK to retain HNW investors is not to make errors 18
Figure 4: The best way for wealth managers in the UK to increase share of wallet is by increasing face-to-face contact 20
Figure 5: The relative client loading of the different sized players in the UK market and its impact on quality of service 24
Figure 6: Large wealth managers contact clients on the telephone less frequently than smaller players 26
Figure 7: The larger the wealth manager, the less frequently their relationship managers meet up with HNW clients 27