INSEAD Library

Includes bibliographical references and index and glossary

Digitized

Contents Global private banking and wealth management Global private banking and wealth management Preface Acknowledgements xi xiii 1 Global Market Overview 1. I The wealth management market 1.1. I Investment mandates 1.1.2 Offshore versus onshore 1.1.3 Market size and growth Box 1.1 Wealth market measurement methodologies: lies, damn lies and wealth statistics? 1.2 Key wealth drivers 1.2.1 Generic drivers Box 1.2 U S Wealth Dynamics 1.2.2 Regional drivers 1.3 Industry economics 1.3.1 Value drivers and key performance indicators 1.4 Competitive landscape 1.4.1 lndustry concentration 2 Industry Challenges: New and Old 2.1 Clients 2.2 Products, pricing and channels 2.2.1 Products 2.2.2 Pricing 2.2.3 Channels 2.3 Competitors and business models 2.4 External environment 1 i 3 4 6 9 13 14 16 20 26 29 35 37 39 40 42 42 43 44 45 47 49 3 Clients 3.1 Key characteristics 3.1.1 Sophistication 3.1.2 Advice 49 49 50 vm ... Contents 3.1.3 Buying behaviour 3.1.4 Relationship fragmentation 3.1.5 Regional differences 3.2 Client segmentation 3.2.1 Traditional high-level segmentation: the wealth pyramid 3.2.2 Other segmentation criteria Box 3.1 Ultra-high net worth individuals 3.2.3 Multiple segmentation criteria 3.2.4 New segments and subsegments Box 3.2 Client segmentation at Coutts Box 3.3 Professional sports players 3.3 Client value management 3.3.1 Client acquisition 3.3.2 Client development 3.3.3 Client retention 51 52 53 54 54 55 56 61 62 63 65 67 70 71 72 4 New Products and Pricing 4.1 New products and services 4.1.1 The advisory process 4.1.2 Tracker-related products 4.1.3 Structured products Box 4.1 Islamic private banking 4.1.4 Alternative investments Box 4.2 Co-investment Box 4.3 Structured products and alternative investments - success in advice-led selling 4.1.5 Property and real estate Box 4.4 lnvestment performance measurement 4.1.6 Lending services 4.1.7 Other products and services 4.2 Product sourcing and management Box 4.5 Multi-manager fund structures Box 4.6 Product management discipline 4.3 Pricing Box 4.7 Pricing discipline 5 Distribution Channels 5.1 Relationship managers 5.1.1 Roles 5.1.2 Organisation and structure 5.1.3 Sales effectiveness Box 5.1 Increasing the time in front of clients 5.1.4 The 'war for talent' 5.2 Other traditional channels 5.2.1 Referral agents 5.2.2 Branches 5.2.3 Client reporting 5.3 New and emerging channels 5.3.1 Online 5.3.2 Broadband and beyond 5.4 Multichannel management 6 Players 6.1 Types of players 6.1.1 Private banks 6.1.2 Universal banks Box 6.1 EFG International Box 6.2 High-profile retrenchments 6.1.3 Financial advisers 6.1.4 Investment banks 6.1.5 Family offices Box 6.3 Peer networks 6.1.6 Regional perspective 6.2 Business system upheaval 6.2.1 Value chain disaggregation 6.2.2 Business model convergence 6.2.3 Divestment of non-core businesses 6.3 Consolidation 6.3.1 Recent consolidation activity Box 6.4 Julius Baer 6.3.2 Consolidation drivers 6.3.3 Best-practice implementation 7 Operational Excellence 7.1 Smart operational sourcing 7.1.1 Operational outsourcing Box 7.1 Wealth management insourcing 7.1.2 Operational offshoring 7.2 Lean operations Box 7.2 Six Sigma 7.2.1 Four lean principles 7.2.2 Benefits 7.2.3 Implementation 7.3 Technology transformation 7.4 Value-added support services 7.5 Instilling operational excellence 7.5.1 Operational redesign 8 Organisational Design 8.1 Organisational structure 8.2 Business unit interfaces 8.2.1 Asset management Box 8.1 Citigroup's asset management exit 8.2.2 Retail bank x Contents 8.2.3 Investment bank 8.3 International dimension 9 Regulatory and Tax Issues 9.1 Money laundering vulnerability 9.2 Regulatory initiatives 9.2.1 Offshore financial centres 9.2.2 USA Patriot Act l Box 9.1 Basle I 9.2.3 Wolfsberg anti-money-launderingprinciples 9.2.4 Implications of regulatory initiatives for wealth managers Box 9.2 International accounting standards Box 9.3 Citigroup Private Bank Japan Box 9.4 Riggs Bank 9.3 Tax initiatives 9.3.1 OECD project on harmful tax practices 9.3.2 US qualified intermediary regime 9.3.3 European Union Savings Directive 9.3.4 lntemational tax amnesties 9.3.5 Implications of tax initiatives for wealth managers 10 The Future 10.1 Introduction 10.2 Sources of new profitable growth 10.2.1 New geographies Box 10.1 Japan 10.2.2 Client relationship deepening 10.2.3 New propositions Box 10.2 Emerging client segments 10.3 Future industry structure 10.4 Critical success factors 10.5 Conclusions Appendices Appendix 1: Country wealth market analyses Appendix 2: FATF 40 Recommendations Appendix 3: FATF special recommendations on terrorist financing Appendix 4: The Wolfsberg anti-money-laundering principles Glossary of Terms Bibliography Index