Global Wealth Management Firms See Assets Growing, Profits Slowing

The world's 20 largest firms manage three-quarters of all global wealth.
By MainStreet Team ,

By Hal M. Bundrick

NEW YORK (

MainStreet

)--Assets are flowing into the world's largest wealth managers at a rapid pace, but firms are finding it increasingly difficult to bring that growth to the bottom line. The Global Private Banking Benchmark conducted by Scorpio Partnership, a London-based strategy and research firm, tracks more than 200 financial institutions, and reports that the world's 20 largest wealth management firms account for more than three-quarters (76%) of global assets under management. These mega-banks are setting themselves apart from the pack in a "champions league," according to the study.

Through the end of 2012, the private banking industry saw an average increase of 23.7% in net new money and now manages a total of $18.5 trillion, up from $16.7 trillion in the previous year. But while inflows are growing, profits are slowing. The average percentage change on profits was 5.3% for 2012, compared to 12.3% for 2011 as firms see operating costs continue to mount.

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The top 20 wealth management firms experienced a 10.9% growth in their AUM, compared to an 8.7% increase for the industry as a whole. UBS regained its position at the top of the list, leading in assets under management with growth of 9.7%. Bank of America slipped into second place with a more modest AUM growth of 5.9%.

"In spite of numerous challenges - both economic and regulatory - we have seen the confirmation of a new champions' league of global wealth managers," says Sebastian Dovey, managing partner of Scorpio Partnership. "Collectively, these businesses have a role in managing three quarters of all HNW wealth. They are beginning to demonstrate very distinct mega-player characteristics which the rest of the competition will have to work out how to challenge."

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The top ten global wealth managers, based on assets under management, were:

  • 1. UBS ($1,705.0 billion AUM)
  • 2. Bank of America ($1,673.5 billion)
  • 3. Wells Fargo ($1,400.0 billion)
  • 4. Morgan Stanley ($1,308.0 billion)
  • 5. Credit Suisse ($ 854.6 billion)
  • 6. Royal Bank of Canada ($628.5 billion)
  • 7. HSBC ($398.0 billion)
  • 8. Deutsche Bank ($387.3 billion)
  • 9. BNP Paribas ($346.9 billion)
  • 10. Pictet ($322.2 billion)

JPMorgan, Citi Private Bank, Goldman Sachs, ABN AMRO, Barclays, Julius Bär, Northern Trust, BNY Mellon, Lombard Odier and Santander rounded out the top twenty global wealth management firms.

--Written by Hal M. Bundrick

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