Every year, the independent research firm Datamonitor identifies trends shaping the Global Wealth Management industry. This year’s report was just published and brings an insightful outlook on several aspects of the business including regulations, investments, competition, as well as products and services.
On that topic, Datamonitor identified changes affecting the HNW meeting, with more focus on two-way interaction as one of the two trends that stand out.
Together with the erosion of banking secrecy, regulatory changes have increased the pressure on asset managers’ profit margins. As a consequence, these institutions have been forced to look for ways to improve their value proposition. In this context, various technological advances directly designed for private wealth management have emerged. These new tools suggest scenarios in which financial institutions can distinguish themselves using technology. While one cannot underestimate the importance a relationship manager plays in creating customer satisfaction, their performance is only as good as the tools available to them. Continue reading →
The wealth management industry remains in a constant state of change since the global economic downturn of 2008. Asset managers seek reliable, impenetrable information safeguards while providing access and clean data to investors. Banking and wealth management leaders consider the pluses and minuses of software as a service (SaaS) and systems available in and out of “the cloud.”
SaaS: Increased Brand Impact and Marketing Efficiency for Financial Firms
Clients demand efficiency in managing assets, including files, documents and presentations; messaging capability within the system; and access to tracking assets and versions across marketing channels. SaaS systems offered in or out of the cloud propose increased productivity and reduced costs.
In the finance industry, the name Harry Markowitz is synonymous with the seminal investment portfolio creation technique known as mean-variance optimization. In short, Markowitz used mathematical methods to create an “efficient frontier” of asset allocation. Picture a graph which measures assets’ volatility (or standard deviation) on the X axis against their expected return on the Y axis. Each point on the efficient frontier shows the portfolio with the highest possible expected return for a given standard deviation for a certain set of assets.
As groundbreaking as Markowitz’s work was, it is now seen as a starting point for balancing risk and return in investing. Soon after mean variance optimization came measures like Value at Risk (or VaR), which uses a probability distribution to approximate how much an investor might lose at a given confidence level. For instance, an investor could use Value at Risk to guarantee with, say, 95% confidence that their loss would not exceed a certain dollar amount. When implemented, their losses will not exceed that limit 95 out of 100 days. Continue reading →
With business stagnating in Switzerland and Europe, Swiss banks are significantly increasing their presence in the Middle East, including Dubai.
Swiss banks are also not only looking to strengthen their local presence. To a certain extent, the Arab Spring and more specifically the civil unrest that started in Bahrain little more than a year ago has been to the benefit of Dubai. These political changes have seriously disrupted the aspirations of the Bahraini government to become a financial hub, to the benefit of Dubai. Certainly, the relative stability of Dubai is not the only reason that makes it a financially attractive area. The opening of their labor market so as not to give preference to local labor within the Dubai International Financial Center, and the possibility of establishing a business there without requiring a local partner, is also contributing to a large extent. Continue reading →
Singapore is aiming to become a sanctuary for the world’s wealthy and their money, beefing up banking secrecy laws and offering generous tax incentives. Hong Kong, China, Malaysia and India are also competing for their share of the cake. At the same time, according to the Capgemini Merrill Lynch 2011 World Wealth Report, Asia-Pacific is home to the second largest population of HNWI, ahead of Europe for the first time. Can the Swiss wealth management community continue to be a dominant player in this context? I’ll be discussing three areas where Switzerland can maintain an edge over its Asian clients by using the right technology. The first is about hiring and keeping top quality people and we’ll discuss how technology plays an important role there. Then, I’ll discuss the issues around deepening the relationships with your clients; and finally, I’ll talk about the tools that can help you expand the breadth of services you offer. Continue reading →
Although FATCA’s regulations are yet to be finalized, we could anticipate the vast impact these will have on non-US Foreign Financial Institutions (FFIs) and their IT systems. SAGE SA’s CEO, Jean-Luc Freymond, has a summary at WealthBriefing.
The demographic distribution of “High Net Worth Individuals” is generally relentlessly diverse. For example, as per the CapGemini/Merrill Lynch World Report 2011, more than 40% of HNWIs in the Asia-Pacific region—excluding Japan—were under 45 years of age. Also, the worldwide share of women in this segment rose sharply to almost 30% according to the same report. Within the same class of customers, change is the new rule. The economic crisis has made them more careful, better informed, more skeptical, and less loyal. It’s risky to assume that it is possible to meet the needs of these clients by drawing on the expectations of traditional clients. Continue reading →