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Competitive Dynamics In Brazilian Wealth Management

 

 

OVERVIEW

•Catalyst

•Summary

•Methodology

 

 

 

EXECUTIVE SUMMARY

 

 

 

MARKET STRUCTURE

•The Brazilian domestic wealth market is served by a range of players but universal banks hold the majority of the market - The majority of high net worth client assets are held in integrated private banks

- Wealth management firms dedicated solely to asset management are numerous

- Independent brokerage firms offering direct and online trading to the retail market are plentiful

 

•Minimum investment thresholds vary across the business models - Brokerages target the mass affluent population with $250,000–500,000 in minimum investments

- Wealth management firms are not subject to a client minimum investment capacity classification but global standards apply

- Private banks target clients with over BRL3m ( $1.5m) in investable assets

- Multi-family offices target those with $10m in investable assets

 

•The offshore market is led by universal banks but regional firms are entering the market

•Key factors shaping the competitive environment in Brazil - The regulatory environment in Brazil favors no business model over another

- Different business models require different certification from Brazilian regulatory bodies

- The majority of Brazilian wealth managers derive income from assets under management and pay their relationship managers a bonus based on profitability

 

 

 

COMPETITIVE TRENDS

•Inward M&A activity has not been as buoyant as some expected - Foreign firms have encountered strong competition from local firms and red tape has stalled activity

- Some foreign firms have retreated or remained offshore to serve Brazilian clients

 

•Organic growth in Brazil has also been muted as São Paulo and Rio de Janeiro remain the key centers for wealth management

 

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