Wealth Management in Germany 2006

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Wealth Management in Germany 2006

  1. 1. A Datamonitor report Wealth Management in Germany 2006 Published: Sep-06 Product Code: DMFS1924 Providing you with: • Sizing and forecasting of mass affluent and high net worth individuals from 2001-2010, generated from Datamonitor's proprietary Global Wealth Model • Data presented for ten liquid asset bands, from EUR50K-75K to EUR3M+ • Opinions from 18 German wealth managers who were surveyed during Datamonitor's Wealth Management Market Leaders Survey 2006 Use this report to... • Survey questions covering business and product/service development, client trends Assess market attractiveness by reviewing and attitudes, and general market issues size and growth forecasts up to 2010 www.datamonitor.com/financial
  2. 2. Wealth Management in Germany 2006 DMFS1924 Introduction This report focuses on the onshore liquid wealth of Mass Affluent and High Net Worth customers. It sizes, segments and forecasts the number of affluent individuals and the liquid assets they hold. It investigates the competitive landscape in terms of players and products and services and presents the results of Datamonitor's large scale survey of the main players. Germany is Europe's largest wealth market, both in terms of the number of wealthy individuals and the total value of liquid assets they hold. However, in a diverse, overcrowded and highly competitive market with strong foreign players, wealth managers have difficulties to gain market share. In addition, clients tend to have more than two wealth managers, a fact which is reflected in a relatively low share of wallet. Therefore, there are plenty of challenges ahead for German wealth managers while the forthcoming wave of inheritors will be certainly welcomed. Key findings and highlights • There are more than 9,000,000 wealthy individuals in Germany holding more than EUR1,630bn in onshore liquid assets. Onshore liquid assets will grow to EUR2trn by 2010. • Europeans largest wealth market is characterized by strong competition and consolidation. Deutsche Bank, UBS and Sal. Oppenheim are perceived by their peers to be the largest wealth managers in Germany. • Inheritance planning and alternative investments have the most business potential in Germany in the next few years. Reasons to buy • Assess market attractiveness by reviewing size and growth forecasts up to 2010 • Improve client service through a greater awareness of their attitudes and concerns • Assess the threats and opportunities for wealth managers in the market Contact us... From Europe: tel: +44 20 7675 7366 fax: +44 20 7675 7016 email: fsinfo@datamonitor.com From Germany: tel: +49 69 9750 3119 fax: +49 69 9750 3320 email: deinfo@datamonitor.com From the US: tel: +1 212 686 7400 fax: +1 212 686 2626 email: usinfo@datamonitor.com From Asia Pacific: tel: +61 2 8705 6900 fax: +61 2 8705 6901 email: apinfo@datamonitor.com
  3. 3. www.datamonitor.com/financial Sample pages from the report Products and distribution There is only moderate interest in life insurance, deposits and savings products, payment mechanisms and foreign exchange Life insurance, deposits and savings products, payment mechanisms and foreign exchange are seen as those products with the least business potential in the next two years with over 90% of respondents seeing either no or only some potential. In contrast to most of its German competitors, Bankhaus Lampe sees lending business as an important part of its wealth management service. According to a press release of the Düsseldorf-based private banker, offering lending is seen as a confidence- building measure that helps to deepen the relationships to clients. Figure 34: Deposits and savings products, payment mechanisms and foreign exchange are perceived to have less business potential No potential Competition for wealthy customers 100% 80% 60% Europeans largest wealth market is characterized by strong 40% competition and consolidation 20% Lots of potential 0% Limited potential Deutsche Bank, UBS and Sal. Openheim are perceived by their peers to be the largest wealth managers in Germany It is no surprise that Germany’s largest bank is also perceived to be the largest wealth manager, according to its peers. When asked about the biggest wealth managers in Germany, 24% of respondents named Deutsche Bank, followed by Sal. Oppenheim and UBS (16% each) and Dresdner Bank (9%). 22% of respondents named other Some potential wealth managers, including ABN AMRO, Berenberg, Commerzbank, Citibank, and General insurance Deposits and Merck & Fink while the remaining 13% opted not to answer the question. savings Mortgages products Personal loans The dominance of Deutsche Bank in its domestic market but also its importance on aGermany Payment mechanisms² Wealthy clients in Life insurance Foreign exchange scale is underlined by financial figures 2005. Invested assets in the bank’s global Private Wealth Management (PWM) division grew by 18% to EUR168bn by the end Q: Please rate the following product areas in terms of their business potential of the year. 8% of this growth came from net inflows of new client assets of EUR11bn, among wealthy clients in your market during the next two years of which EUR2bn from clients in Germany. As a comparison, Germany’s third largest ² credit cards, money transfers etc. bank, Commerzbank, reported assets under management in its Wealthy individuals in Private Banking Germany hold more than EUR1,630bn in Source: Datamonitor’s Wealth Management Market Leaders Survey 2006 DATAMONITOR department of EUR22bn, an increase of 12% year-on-year. onshore liquid assets The 9,080,670 wealthy individuals in Germany held a total of EUR1,630.5bn in liquid Wealth Management in Germany 2006 DMFS1924 assets by the end of 2005, compared to EUR1,324.8bn in 2001. This reflects an © Datamonitor (Published 09/2006) Figure 18:Page 74 Deutsche Bank, UBS and Sal. Oppenheim are perceived to be annual compounded growth rate of 5.3% over the last 5 years. The mass affluent This report is a licensed product and is not to be photocopied the biggest wealth managers in Germany segment held EUR900.1bn in liquid assets while the high net worth asset bands accounted for the remaining EUR730.4bn. From this follows that in 2005 the German Other Deutsche Bank population (9.6% of total wealthy individuals) held almost half of total liquid HNW 22% assets in Germany (44.8%). Again, the asset band EUR3M+ has seen the strongest 24% growth, with aggregate liquid assets reaching EUR210.6bn in 2005, up from EUR141.0bn in 2001, resulting in an increase of 10.6% compounded annually. No answer given 13% As a comparison, there were 2,416,000 wealthy individuals in the Nordic region, holding a total of EUR408.9bn in liquid assets by the end of 2005. The total UBS 16% population of Denmark, Finland, Norway and Sweden combined was more than Dresdner Bank 24,250,000 as of the end of 2005, compared to Germany’s 82,431,390. Relative to its Sal. Oppenheim 9% 16% population, the UK has more wealthy individuals than Germany, with almost 7.4 million mass affluents and HNWs holding more than EUR1.6trn in liquid assets in Q: In your opinion, who are the biggest wealth managers in Germany? (open-end) 2005 (at a total population of 59,079,421). Source: Datamonitor’s Wealth Management Market Leaders Survey 2006 DATAMONITOR Figure 2: Liquid wealth of German mass affluent and HNW individuals Wealth Management in Germany 2006 DMFS1924amounted to more than EUR1.6trn in 2005 © Datamonitor (Published 09/2006) Page 47 This report is a licensed product and is not to be photocopied 1,800 1,600 Mass affluent and HNW aggregate EUR3M+ 1,400 EUR1.5M-3M liquid assets, EURbn EUR1M-1.5M 1,200 EUR750K-1M EUR500K-750K 1,000 EUR300K-500K 800 EUR150K-300K 600 400 EUR100K-150K 200 EUR75K-100K EUR50K-75K 0 2001 2002 2003 2004 2005 Source: Datamonitor’s Global Wealth Model 2006 DATAMONITOR Wealth Management in Germany 2006 DMFS1924 © Datamonitor (Published 09/2006) Page 21 This report is a licensed product and is not to be photocopied Request more sample pages...for FREE! From Europe: tel: +44 20 7675 7366 fax: +44 20 7675 7016 email: fsinfo@datamonitor.com From Germany: tel: +49 69 9750 3119 fax: +49 69 9750 3320 email: deinfo@datamonitor.com From the US: tel: +1 212 686 7400 fax: +1 212 686 2626 email: usinfo@datamonitor.com From Asia Pacific: tel: +61 2 8705 6900 fax: +61 2 8705 6901 email: apinfo@datamonitor.com
  4. 4. Wealth Management in Germany 2006 DMFS1924 Table of contents EXECUTIVE SUMMARY - German wealth managers tend to have relatively • Introduction long-term relationships with their private clients • Wealthy clients in Germany • Supplementary data • Competition for wealthy customers • Products and distribution COMPETITION FOR WEALTHY CUSTOMERS • Introduction INTRODUCTION • Key findings • What is this report about? • Europeans largest wealth market is characterized • Who is the target reader? by strong competition and consolidation • How to use this report - Deutsche Bank, UBS and Sal. Openheim are • Note to readers perceived by their peers to be the largest wealth managers in Germany - The German banking sector and private banking in WEALTHY CLIENTS IN GERMANY particular are facing further consolidation • Introduction - The elite of German wealth managers: who comes • Key findings first and why? • The German mass affluent and HNW market has - Minimum investment thresholds for new clients in seen steady growth in the last four years Germany vary between EUR250K and EUR500K - There are more than 9,000,000 wealthy individuals - German wealth managers are most concerned in Germany about finding and attracting quality staff - Wealthy individuals in Germany hold more than - German wealth managers face competition from EUR1,630bn in onshore liquid assets different parts of the financial industry - Onshore liquid assets in Germany will grow to - The main competitors will remain the same in the EUR2trn by 2010 next few years - Inheritors represent biggest opportunity in German • German wealth managers are concentrating on wealth market obtaining new clients and improving CRM and - German investors put up to 30 per cent of their support systems liquid assets offshore - Obtaining new clients will drive revenue in • Private clients in Germany are demanding a high Germany in the next two years level of interaction and protection of their current - Increasing share of wallet will come through more asset base face to face contact, offering financial planning and - Personal relationship is the key determinant of better leveraging CRM choice of wealth manager in Germany - Improving CRM and support systems is the key - Referrals from existing clients remains the number strategic initiative one customer acquisition technique in Germany - IT and CRM system costs is the main concern in - Clients are demanding to know more about their controlling cost bases portfolio now than two years ago • German wealth managers tend to organize their - Protecting their current asset base is most clients' business around a key relationship manager, but main interest not all specialize in key client segments - Quick problem solving and regular contact are the - German wealth managers avoid giving their clients best ways to retain clients a single point of contact - There are several key reasons why private clients - Almost 40 per cent of German wealth managers in Germany are leaving a wealth management do not have dedicated teams organized around service specific customer groups - The majority of clients in Germany have more than - Most relationship managers in Germany are two wealth managers assessed based on revenue, profit and number of - German wealth managers should try to increase clients clients' share of wallet “...Reputation is key: referrals from existing clients is the number one customer acquisition technique in Germany...” Ingo Nachbaur, Wealth Management in Germany 2006
  5. 5. www.datamonitor.com/financial - New relationship managers will come mostly by Table 9: In your experience, what are the key influences hiring them from other wealth managers that determine a client's choice of wealth • Supplementary data management service? Table 10: In your experience, what are the most effective customer acquisition techniques in your PRODUCTS AND DISTRIBUTION market? • Introduction Table 11: To what extent do you agree with the following? • Key findings Table 12: What are your clients most interested today? • Inheritance planning has most potential in Table 13: What is the best way to retain clients? Germany while foreign exchange is least attractive Table 14: In your experience, what are the most likely - Inheritance planning and alternative investments reasons for clients to leave a wealth have the most business potential in Germany management service? - There is only moderate interest in life insurance, Table 15: Which statement do you most agree with? deposits and savings products, payment Table 16: Approximately what share of your clients' wallet mechanisms and foreign exchange do you think you have on average? - German wealth managers will focus on alternative Table 17: How long has your client base, on average, investments, financial planning and traditional been with you? investments in coming years Table 18: Number of German banks and branch offices, • Developing new distribution channels/approaches 1995-2004 is not on top of the strategic agenda of German Table 19: German wealth managers: recent changes of wealth managers ownership - German wealth managers seek to improve CRM Table 20: In your opinion, who are the biggest wealth and support systems managers in Germany? (open-end) - Accountants and lawyers are important distribution Table 21: What is your minimum asset threshold for new channels in German wealth management clients? - More German wealth managers should be Table 22: What are the most pressing concerns for your focusing on developing new distribution business at present? approaches/channels Table 23: How much of a threat to your wealth business • Supplementary data are the following competitors today? Table 24: How much of a threat to your wealth business APPENDIX will the following competitors be in three years? Table 25: What will most determine revenue growth in the German market in the next two years? TABLES Table 26: What is the most effective means of increasing Table 1: Number of German MA and HNW individuals share of wallet? by liquid asset band, 000s, 2001-2005 Table 27: What strategic initiatives are you planning or Table 2: German MA and HNW aggregate onshore implementing in the next year? liquid assets by liquid asset band, EURbn, Table 28: What are your main areas of concern in 2001-2005 controlling your cost base? Table 3: Forecasted number of German MA and HNW Table 29: Which best applies to your company's individuals by liquid asset band, 000s, relationship management? 2006-2010 Table 30: Do you have dedicated teams set up in Table 4: Forecasted German MA and HNW aggregate Germany to attract and manage any of the onshore liquid assets by liquid asset band, following customer groups? EURbn, 2006-2010 Table 31: What quantitative measures are used to assess Table 5: What client types offer the greatest potential in your relationship managers? your country in the next five years? Table 32: Where will you get your staff from in the next Table 6: In your opinion, what proportion of liquid assets three years? do investors in your country put offshore? Table 33: Please rate the following product areas in Table 7: What is the main motivation for investors in terms of their business potential among wealthy your country to put money offshore? clients in your market during the next two years Table 8: In your opinion, where do investors from your Table 34: From the product areas just mentioned, which country prefer to put their offshore money? three will your company focus most resources on in the next two years? Contact us... From Europe: tel: +44 20 7675 7366 fax: +44 20 7675 7016 email: fsinfo@datamonitor.com From Germany: tel: +49 69 9750 3119 fax: +49 69 9750 3320 email: deinfo@datamonitor.com From the US: tel: +1 212 686 7400 fax: +1 212 686 2626 email: usinfo@datamonitor.com From Asia Pacific: tel: +61 2 8705 6900 fax: +61 2 8705 6901 email: apinfo@datamonitor.com
  6. 6. Wealth Management in Germany 2006 DMFS1924 Table 35: What strategic initiatives are you planning or Figure 19: The German wealth management market is implementing in the next year? characterized by a diverse mix of domestic Table 36: How important are the following distribution providers channels for your wealth business today? Figure 20: The elite of German wealth managers Table 37: To what extent do you agree with the following? according to German newspaper Welt am Sonntag, 2006 Figure 21: Many German wealth managers target clients FIGURES with EUR250K+ Figure 1: The number of German mass affluent and Figure 22: German wealth managers are most concerned HNW individuals has grown about finding and attracting quality staff Figure 2: Liquid wealth of German mass affluent and Figure 23: Large wealth managers are perceived as HNW individuals amounted to more than strongest competitors EUR1.6trn in 2005 Figure 24: The main competitors will remain the same in Figure 3: The German mass affluent and HNW market the next three years will reach EUR2trn by 2010, held by more than Figure 25: Obtaining new clients and increasing share of 10.5m people wallet will most determine revenue growth in Figure 4: Datamonitor forecasts steady growth in all Germany in the next tow years asset bands for the German market in the next Figure 26: Increasing face to face contact is the most five years effective way of increasing share of wallet Figure 5: Inheritors offer the greatest potential in the Figure 27: Improving CRM and support systems is the key German market in the next five years initiative ahead Figure 6: German investors put up to 30 per cent of their Figure 28: IT and CRM system costs are the main concern liquid assets offshore in controlling cost bases Figure 7: Tax avoidance is the main motivation for Figure 29: German wealth managers tend to provide their German investors to put their money offshore clients more than one contact Figure 8: Switzerland is the number one offshore Figure 30: 40 per cent of surveyed wealth managers destination for German investors stated that they do not have dedicated teams Figure 9: Personal relationship is the most important set up to target and attract specific customers determinant of a client's choice of wealth Figure 31: Most relationship managers in Germany are management service assessed on revenue, profit and number of Figure 10: Word of mouth remains most effective for client clients acquisition Figure 32: New relationship managers will come mostly by Figure 11: Clients are demanding to know more about the hiring them from competitors management of their portfolio now than two Figure 33: The biggest business potential lies in years ago inheritance planning and alternative Figure 12: Clients are most interested in protecting their investments asset base Figure 34: Deposits and savings products, payment Figure 13: The best ways to retain clients are talking to mechanisms and foreign exchange are them regularly and quick problem solving perceived to have less business potential Figure 14: German wealth managers identify several Figure 35: German wealth managers will focus on reasons why clients are leaving a wealth alternative investments management service Figure 36: German wealth managers seek to improve Figure 15: The majority of wealthy individuals in Germany CRM and support systems in the next year has more than two wealth managers Figure 37: Accountants and lawyers are seen as important Figure 16: German wealth managers should concentrate distribution channels for German wealth on gaining a bigger share of clients' wallets managers Figure 17: German wealth managers tend to have Figure 38: German wealth managers will increasingly relatively long-term relationships with their develop services to manage financial advisors clients as part of their client base Figure 18: Deutsche Bank, UBS and Sal. Oppenheim are perceived to be the biggest wealth managers in Germany “...Inheritance planning and alternative investments have the most business potential in Germany in the next few years...” Ingo Nachbaur, Wealth Management in Germany 2006
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  8. 8. Wealth Management in Germany 2006 DMFS1924 Interested in this topic? Wealth management is one of the fastest growing and most dynamic sectors of the retail financial services market. The battle for wealthy customers is intense and the stakes are high. Traditional private banks struggle to maintain customer bases that they had previously believed unassailable, whilst new entrants seek niche opportunities, and ambitious investment banks widen the boundaries of their traditional customer base. Datamonitor’s Global Wealth portfolio is the fundamental tool for survival in this fast moving industry. Other reports available in this series Wealth Management in France 2006 Sizes, segments and forecasts the mass affluent and high net worth market in France. Presents competitor insight on the market based on large scale survey of the main players. Published: Dec-06 Product code: DMFS1923 Wealth Management in Switzerland 2006 Sizes, segments and forecasts the mass affluent and high net worth market in Switzerland. Assesses offshore business there. Presents competitor insight on the market based on large scale survey of the main players. Published: Aug-06 Product code: DMFS1925 Wealth Management in the Nordic Region 2006 Sizes, segments and forecasts the mass affluent and high net worth market in Finland, Denmark, Norway and Sweden. Presents competitor insight on the market based on large scale survey of the main players. Published: Aug-06 Product code: DMFS1927 Wealth Management in Belgium and the Netherlands 2006 Sizes, segments and forecasts the mass affluent and high net worth market in Belgium and the Netherlands. Presents competitor insight on the market based on large scale survey of the main players. Published: Aug-06 Product code: DMFS1926 For more information about our products visit www.datamonitor.com/financial Subscribe to Monitor A monthly update of Datamonitor's new financial services products, delivered to you by email. Email: monitor@datamonitor.com
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