|By Marketwired .||
|June 9, 2014 01:00 PM EDT||
NEW YORK, NY -- (Marketwired) -- 06/09/14 -- The growth of global private wealth may have surpassed expectations in 2013, particularly in developed markets, but wealth managers nonetheless need to take action on multiple fronts if they hope to gain market share and increase profits over the next few years, according to a new report by The Boston Consulting Group (BCG). The report, Riding a Wave of Growth: Global Wealth 2014, is being released today.
The report, BCG's fourteenth annual study of the global wealth-management industry, addresses the current size of the market, the performance levels of leading institutions, and the state of offshore banking. It also provides a thorough analysis of key trends shaping the business landscape -- including the growing importance of digital technology and the pursuit of optimal business models. Finally, the report offers clear action steps that players should take in their quest to build on the industry's solid performance in 2013.
"The key challenge in developed economies is how to make the most of a large existing asset base amid volatile growth patterns," said Brent Beardsley, a BCG senior partner and a coauthor of the report. "The task in the developing economies is to attract a sizable share of the new wealth being created there. Overall, the battle for assets and market share will become increasingly intense in the run-up to 2020."
Market Sizing. According to the report, global private financial wealth grew by 14.6 percent in 2013 to reach a total of $152.0 trillion. The rise was stronger than in 2012, when global wealth grew by 8.7 percent. The key drivers, for the second consecutive year, were the performance of equity markets and the creation of new wealth in rapidly developing economies (RDEs).
On a regional basis, Asia-Pacific (excluding Japan) posted the strongest growth in private wealth (30.5 percent), followed by Eastern Europe (17.2 percent), North America (15.6 percent), the Middle East and Africa (11.6 percent), and Latin America (11.1 percent at constant exchange rates, not considering currency devaluations in many Latin American countries). Private wealth grew more modestly in Western Europe (5.2 percent) and in Japan (4.8 percent at constant exchange rates, not considering a weaker yen). Asia-Pacific (excluding Japan) is expected to overtake Western Europe as the second-wealthiest region in 2014, and North America as the wealthiest in 2018. Global private wealth is projected to post a compound annual growth rate (CAGR) of 5.4 percent over the next five years to reach an estimated $198.2 trillion by the end of 2018.
Millionaires. The report says that the total number of millionaire households (in U.S. dollar terms) reached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 percent of all households globally. The U.S. had the highest number of millionaire households (7.1 million), as well as the highest number of new millionaires (1.1 million). Robust wealth creation in China was reflected by its rise in millionaire households from 1.5 million in 2012 to 2.4 million in 2013. The number of millionaire households in Japan fell from 1.5 million to 1.2 million, driven by the 15 percent fall in the yen against the dollar.
Offshore Wealth. Private wealth booked across borders reached $8.9 trillion in 2013, an increase of 10.4 percent over 2012 but below the increase in total global private wealth of 14.6 percent. As a result, the share of offshore wealth declined slightly from 6.1 percent to 5.9 percent. Offshore wealth is projected to grow at a solid CAGR of 6.8 percent to reach $12.4 trillion by the end of 2018, driven especially by investors in developing economies seeking higher levels of political and financial stability, greater depth in wealth management products and expertise, and geographic diversification. Switzerland remained the leading offshore booking center with $2.3 trillion in assets, representing 26 percent of global offshore assets. However, the country remains under heavy pressure because of its significant exposure to assets originating in developed economies. Some of these assets are expected to be repatriated following actions by various governments to address tax evasion. More broadly, in today's environment, wealth managers must ensure that they comply fully with all regulatory measures in the markets they serve.
Wealth Manager Benchmarking. BCG benchmarked the performance of more than 130 institutions -- either pure private banks or wealth management units of large universal-banking groups. Wealth managers globally had another year of excellent growth in 2013, with assets under management (AuM) rising by 11 percent. This performance, which followed AuM growth of 13 percent in 2012, was driven mainly by asset appreciation owing to rising equity markets. Yet despite sizable AuM growth, profit margins remained largely flat as wealth managers continued to grapple with rising costs, notably those related to regulatory compliance.
The Digital Dilemma. The continuing development and adoption of digital communication will reshape the way products, services, and advice are provided to wealth management clients. Technology can change the dynamics of what constitutes competitive advantage. Yet many players have been unable to leverage digital technologies in a way that truly enhances their overall offering. According to the report, as client expectations continue to rise, wealth managers must put a higher priority on developing sophisticated digital capabilities and integrating them seamlessly into their current channels and business models.
"The road ahead won't be an easy one," said Daniel Kessler, also a BCG partner and a coauthor of the report. "Winning wealth managers, in any region, will be those that find the optimal business model for their own resources, capabilities, and aspirations, and execute their chosen strategy successfully. If the markets keep rising, all the better."
A copy of the report can be downloaded at www.bcgperspectives.com.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.
The Boston Consulting Group
Global Media Relations Manager
Tel +1 617 850 3783
Fax +1 617 850 3701
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Mar. 22, 2017 10:15 PM EDT Reads: 3,211
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, will discuss some of the security challenges of the IoT infrastructure and relate how these aspects impact Smart Living. The material will be delivered i...
Mar. 22, 2017 10:15 PM EDT Reads: 1,677
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Mar. 22, 2017 10:15 PM EDT Reads: 3,154
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
Mar. 22, 2017 09:30 PM EDT Reads: 2,273
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
Mar. 22, 2017 06:30 PM EDT Reads: 1,079
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, will provide a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services ...
Mar. 22, 2017 06:15 PM EDT Reads: 3,906
VeriStor Systems has announced that CRN has named VeriStor to its 2017 Managed Service Provider (MSP) 500 list in the Elite 150 category. This annual list recognizes North American solution providers with cutting-edge approaches to delivering managed services. Their offerings help companies navigate the complex and ever-changing landscape of IT, improve operational efficiencies, and maximize their return on IT investments. In today’s fast-paced business environments, MSPs play an important role...
Mar. 22, 2017 05:45 PM EDT Reads: 1,777
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
Mar. 22, 2017 04:30 PM EDT Reads: 771
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
Mar. 22, 2017 03:45 PM EDT Reads: 1,119
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Mar. 22, 2017 03:30 PM EDT Reads: 757
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Mar. 22, 2017 03:15 PM EDT Reads: 506
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
Mar. 22, 2017 02:45 PM EDT Reads: 2,203
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Mar. 22, 2017 02:15 PM EDT Reads: 2,148
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Mar. 22, 2017 02:00 PM EDT Reads: 805
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
Mar. 22, 2017 02:00 PM EDT Reads: 1,351