Wealth management is one of the areas in which banks and other personal financial services players are investing heavily. But the market is changing fast. Going forward, players therefore need to adapt their strategies to the new realities: what worked in the past will not, for the most part, be appropriate in the future. This unique book, written by a former McKinsey consultant, offers an up-to-date, detailed, practical understanding of this exciting area of financial services. Global Private Banking and Wealth Management. "David Maude has written a fascinating and comprehensive overview of private banking which will be of great interest to practitioners, clients and students." - Dr. Alex W. Widmer, Chief Executive, Officer, Private Banking, Julius Baer "The essence of private banking has not changed for hundreds of years, but the global environment in which we operate and the tools at our disposal are evolving at an unprecedented rate. This book is welcome for providing a remarkably thorough, detailed and accurate overview of the industry and the issues it presently faces." - Alexander Hoare, chief Executive, C Hoare & Co "David Maude has produced a powerful analysis of the wealth management market. At a time when the industry is evolving rapidly and facing numerous challenges, this book will be particularly relevant and helpful to private banking professionals around the globe."- Francois Debiesse, Chief Executive Officer, BNP Paribas Private Bank "A Comprehensive guide to the wealth management industry in terms of development, the current economic and competitive landscape, and future areas of growth." - Bryan Henning, Global Product Head, Wealth Management, Standard Chartered Bank Wealth management is one of the areas in which banks and other personal financial services players are investing heavily. But the market is changing fast. Going forward, players therefore need to adapt their strategies to the new realities: what worked in the past will not, for the most part, be appropriate in the future. This unique book, written by a former McKinsey consultant, offers an up-to-date, remarkably detailed, practical understanding of this exciting area of financial services. Packed with best-practice examples and perspectives on the opportunities ahead, highlights include: Wealth management challenges: new and old - The changing client profile - New products, pricing and channels - Competitor and business-model landscapes - External challenges and opportunities - Future perspective - Wealth market analyses for 25 countries For anyone involved in wealth management, this should be a compulsory read. DAVID MAUDE is an independent consultant. A former consultant at McKinsey & Company, he serves financial institutions around the world, advising on their key strategic, organisational and operational issues. He has also worked in strategy for Barclays, and spent six years as a senior economist at the Bank of England and HM Treasury. He co-authored the pioneering Euromoney book, Private Banking: Maximising Performance in a Competitive Market , published in 1996. He may be contacted at david_maude@lycos.co.uk. Global Private Banking and Wealth Management The New Realities By David Maude John Wiley & Sons Copyright © 2006 David Maude All right reserved. ISBN: 978-0-470-85421-1 Chapter One Global Market Overview In the late 1990s, wealth management was reported to be the fastest growing sector of the financial services industry. Though the 2000-2002 downturn took its toll on many wealth management providers, looking ahead, the industry remains attractive, with strong fundamentals. Globally, the number of millionaires continues to grow at more than 7% a year - around 6 times the pace of the population as a whole. The industry is certainly up there with investment banking in terms of fun, glamour and glitz. However, to meet the evolving needs of clients, the industry has become increasingly broad and complex. For decades, the industry was dominated by a select group of sleepy, very traditional players. But during the 1990s, the industry changed almost beyond recognition. There was a huge influx of new players offering a wide range of specialised products and services to a broader, ever more demanding client base. The aims of this introductory chapter are to: Define the wealth management market and provide an idea of its size and recent growth. Examine the key drivers of the wealth management industry. Outline the economics of the industry. Briefly describe the competitive landscape. Most of the themes introduced here will be explored in more detail in later chapters. 1.1 THE WEALTH MANAGEMENT MARKET There is no generally accepted standard definition of wealth management - both in terms of the products and services provided and the constitution of the client base served - but a basic definition would be financial services provided to wealthy clients, mainly individuals and thei