Abstract
Overview
Introduction
As in many markets, the past few years have been a testing time for US wealth
managers as both personal wealth and the resulting revenues have been hit by
the global downturn and the bursting of the tech bubble. Since 2003 however,
the situation has improved and this report examines the recent developments
both in terms of market growth and competition to provide an insight into this
key market.
Scope
- Sizes and forecasts the number and aggregate onshore liquid assets of high
net worth individuals in the US from 2001-2010 across five asset bands
- Identifies the key competitors for those services and analyses the current
competitive environment in the US
- Utilizes Datamonitor's proprietary Global Wealth Model and in-depth
interviews with senior executives from some of the top US wealth managers
Report HighlightsM
High net worth individuals hold 66% of the total mass affluent and high net
worth liquid wealth in the US. The highest levels of liquid wealth were in the
highest USD10m+ and lowest USD300k - USD400k asset bands, which represented
14% and 15% of total high net worth liquid assets respectively.
Granting U.S. investors access to global markets is going to be the most
prominent issue for the next few years, according to industry experts.
Investors will begin to demand investment products that grant them
international exposure, so as to take advantage of growth opportunities in
growing markets such as India or China.
Assets held by high net worth individuals in the U.S. will grow by 37% over
the next five years, from USD14bn to USD19.2bn. The highest two asset bands,
USD4m - 10m and USD10m+ will constitute just over a quarter of all liquid
wealth held by high net worth individuals in the U.S. over the next five years;
Reasons to Purchase
- Identify how large the US wealth management market is and how much you
could gain by entering the market
- Identify the key US wealth managers, where you fit in among them and their
current considerations with regard to competing in this market
- Use the market sizing forecasts and key future trends to shape your US
wealth management strategy going forward
Table of Contents
- CHAPTER 1 EXECUTIVE SUMMARY
- Market context
- Competitive Dynamics
- The Future Decoded
- CHAPTER 2 INTRODUCTION
- What is this report about?
- Who is the target reader?
- How to use this report
- CHAPTER 3 MARKET CONTEXT
- Introduction
- Key findings
- Just over 20% of the U.S. population is classed as a mass affluent or
high net worth investor
- There were 14 million HNW individuals in the US in 2005
- HNW individuals in the US controlled USD12,717bn in liquid onshore
assets in 2005
- The US high net worth market now exceeds the levels attained before the
market downturn of 2001
- The number of high net worth individuals in the US has grown by 18%
between 2001 and 2005
- The assets held by US high net worths have grown by 23.2% between 2001
and 2005
- Regional income distribution in the US varies significantly
- New Hampshire, New Jersey & Maryland are the richest U.S. states
- Data tables
- CHAPTER 4 COMPETITIVE DYNAMICS
- Introduction
- Key findings
- There are few key competitors in the US HNW market
- Smaller competitors have developed a number of strategies to
differentiate themselves
- Competitor Profile: Citigroup Private Bank
- Citigroup Private Bank is the first company to bring banking, insurance
& investment services to U.S. clients under one umbrella
- Competitor Profile: UBS Wealth Management
- UBS positions itself as the world's leading wealth management firm
- Competitor Profile: Merrill Lynch
- Merrill Lynch has client assets totaling USD1.8tn
- Competitor Profile: JP Morgan
- JP Morgan is one of the leading financial services firms in the world,
with offices in more than 50 countries
- Market Issues
- Regulation had a high impact on competitors in the US HNW market in 2005
- Rule 202 a burden on some banks in the U.S. high net worth market
- Sarbanes-Oxley Act has placed considerable strain on regulatory
compliance and resources in the U.S. high net worth market
- The Patriot Act has added to the regulatory strain placed on U.S. wealth
management firms
- Mergers, acquisitions and consolidation activity was low in 2005
- Structured products were popular among US HNW clients in 2005, although
the way a firm approaches these products is vital to their success
- Tax reductions have stimulated investment market participation
- Acquiring and retaining quality staff continued to be an issue for many
competitors
- There has been more of a focus on client service rather than product
innovation in the U.S. high net worth market
- Lack of scalability is preventing banks from reaching the very richest
clients
- 70% of high net worth households in the U.S. are looking at alternative
assets such as hedge funds
- CHAPTER 5 THE FUTURE DECODED
- Introduction
- Key findings
- The number of HNW individuals in the US is set to increase by roughly
34% by 2010
- Assets held by US HNWs will grow to USD19.2bn over the next five years
- Giving investors access to global investments will affect the market
most over the short term
- Investors may begin to shift to the bigger weath management firms
- World Wealth Report shows that investors are looking to amplify their
global holdings
- U.S. high net worths on average, allocate more than three quarters of
their portfolios to domestic holdings
- Firms will increasingly have to provide a comprehensive wealth
management service
- US wealth management firms anticipate increasing strength of
internet-based and independent firms over the coming year
- The U.S. high net worth industry will see increased consolidation over
the next few years
- U.S. private banking market expected to be hugely profitable over the
next decade
- Leveraging links with communities, marketing to new sectors and building
a network of experts identified as key challenges for the U.S. wealth market
- The "Baby Boomer" population is expected to be a rich source
of future revenue for U.S. wealth management firms
- Data tables
- APPENDIX
- Definitions
- CAGR
- Mass Affluent
- High net worth (HNW)
- Liquid assets
- Liquid asset bands
- Research methodology
- Further Reading
- Global Wealth Management SPP
- Interactive Databases
- Market Reports
- Strategic Insight Reports
- Wealth Management Competitor Tracker
- Datamonitor Asia Pacific Wealth Management SPP
- Datamonitor's Global Wealth Model
- The UK sub model
- Forecasting methodology
- SPP writing team
- List of Tables
- Table 1: US: Number of mass affluent and high net worth individuals,
segmented by asset band, USD, 2001 - 2005
- Table 2: US: value of aggregate liquid wealth, segmented by asset
band, USD, 2001-2005
- Table 3: US: value of aggregate liquid wealth, segmented by asset
band, USD, 2001-2005
- Table 4: Three-year average median household income by state, 2002-2004
- Table 5: US: Forecast number of mass affluent and high net worth
individuals, segmented by asset band, USD, 2006 - 2010
- Table 6: US: forecast value of aggregate liquid wealth, segmented by
asset band, USD, 2006-2010
- List of Figures
- Figure 1: The highest levels of liquid wealth among high net worth
individuals are to be found in the highest and lowest asset bands
- Figure 2: The number of U.S. high net worth individuals is expected to
grow by nearly 50% over the next five years
- Figure 3: Over half of American high net worth individuals have
between USD300-500k in liquid assets
- Figure 4: The highest levels of liquid wealth among high net worth
individuals are to be found in the highest and lowest asset bands
- Figure 5: The vast majority of U.S. high net worth individuals have
held liquid wealth in the lowest two asset bands since 2001
- Figure 6: U.S. high net worth individuals have in general held the
most liquid wealth in the highest and lowest asset bands since 2001
- Figure 7: Households in New Hampshire, New Jersey and Maryland have
the highest median income averaged over three years, 2002-2004
- Figure 8: The number of U.S. high net worth individuals is expected to
grow by nearly 50% over the next five years
- Figure 9: Liquid assets held by high net worth individuals in the U.S.
is expected to grow by nearly 50% over the next five years
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