Table of Contents

UK Wealth Management 2003 - UK Wealth Management 2003 presents a clear and insightful picture of the market for wealth services in the UK and provides a detailed analysis of the UK wealth management competitive landscape, supported by nine in-depth competitor profiles.

Product Code: DMFS1513

Publication Date: 09-Oct-2002

---

Overview

Introduction

UK Wealth Management 2002 examines the UK onshore wealth management market from both a supply and a demand perspective. The 1997-2001 size the affluent market (GBP100k+) by number of individuals, aggregate wealth and source of wealth are provided and the number of ultra high net worths (GBP5m+) are segmented into 9 asset bands for 2001. Market shares for 100+ wealth managers are analyzed in three competitive segments: GBP1m+, GBP200k-1m and GBP50k-200k. 9 competitive profiles are presented.

Scope

· Coverage: UK affluent market (GBP100,000+) and UK ultra high net worth market (GBP5m+)

· In-depth interviews with senior executives within the largest wealth management competitors in the UK, resulting in profiles for (see below):

Report Highlights

The number of high net worths in the UK fell slightly between 2000 and 2001. The lower asset bands were hardest hit by this fall, while ultra high net worths were least affected. In fact, an additional 1,000 people were added to the ranks of the super-rich in 2001.

Wealth managers held 62% of millionaires’ liquid assets in 2001.The largest players were Barclays, HSBC Republic and Merrill Lynch Investment Managers. The implication of this dominance of wealth managers in the GBP1m+ market is that competitors seeking to acquire new clients will have to take them away from other wealth managers; there is very little money not already being managed.

Wealth managers held 26% of the high net worth market in 2001. It is likely that in general a lower proportion of individuals with between GBP200k-1m use wealth managers to manage their portfolios for two reasons. First, a proportion of these investors may be completely or partly self-directed. Second, a large proportion of all retail savings and investments in the UK are held in deposits. Coutts, Lloyds TSB Private Banking and HSBC Investment Managers in this category.

Scope

· Barclays Private Clients, HSBC, Merrill Lynch Invest. Mgrs, Coutts, Lloyds TSB Private Bank, SG Hambros, Gerrard, Brewin Dolphin, NatWest Private Bank

---

Table of Contents

---

CHAPTER 1 EXECUTIVE SUMMARY	3
CHAPTER 2 INTRODUCTION	14
What is this report about?	14
Who is the target reader?	14
How to use this report	15
CHAPTER 3 MARKET CONTEXT	16
The year in review: trends in wealth management 2001-2	18
Introduction	18
Competitive environment	18
Wealth management launches in the UK	18
Withdrawals and retrenchment	20
Products and services	21
Alternative investments	21
Exchange-traded funds	23
One step forward … two steps back?	25
A helping hand: 3rd party funds and alliances	25
Downsizing: a reversal of fortune in wealth management	28
The high net worth market by size of assets and number of individuals	29
The sub-groups	31
Ultra high net worth customers	32
Market size	32
Market growth	33
Earners versus Inheritors	34
Source of wealth	35
Age	36
Market data	39
CHAPTER 4 COMPETITIVE DYNAMICS	45
Competitor market shares	48
Market share in the total GBP100k market	49
Competition in the millionaires’ market (GBP1m+)	50
Competition in the high net worth market (GBP200k-1m)	53
Competition in the mass affluent market	56
Company strategies to achieve market share	58
Competitors in the millionaires’ market	58
Barclays Private Clients: fluent in finance	58
Market/segment coverage	59
Product specialisms	59
Client management structure	60
Distribution and alliances	61
Customer acquisition	61
HSBC: the World’s Local Bank	62
Market/segment coverage	62
Product specialisms	63
Client management structure	64
Distribution and alliances	65
Customer acquisition	66
Merrill Lynch Investment Managers: the US powerhouse weighs in	67
Market/segment coverage	67
Product specialisms	67
Client management structure	68
Distribution and alliances	68
Customer acquisition	69
Competitors in the high net worth market	70
Coutts: the forward-looking traditional private bank	70
Market/segment coverage	71
Product specialisms	71
Client management structure	72
Distribution and alliances	73
Customer acquisition	73
Lloyds TSB Private Banking: Create didn’t take	75
Market/segment coverage	75
Product specialisms	75
Client management structure	76
Distribution and alliances	76
Customer acquisition	76
SG Hambros: strong brand, strong backing	77
Market/segment coverage	77
Product specialisms	78
Client management structure	79
Distribution and alliances	79
Customer acquisition	80
Competitors in the mass affluent market	81
Gerrard Group: evolving from stockbroker to wealth manager	81
Market/segment coverage	82
Product specialisms	83
Client management structure	83
Distribution and alliances	84
Customer acquisition	85
Brewin Dolphin: one to watch	85
Market/segment coverage	86
Product specialisms	86
Client management structure	87
Distribution and alliances	87
Customer acquisition	88
NatWest Private Banking: targeting the mass affluent for RBS	88
Market/segment coverage	89
Product specialisms	89
Client management structure	89
Distribution and alliances	90
Customer acquisition	91
Competitive data	93
CHAPTER 5 APPENDIX	99
Companies included in the market share analysis	99
Companies excluded from the market share analysis	101
Definitions	102
Further Reading	105
Datamonitor Reports	105
Datamonitor Global Wealth Service Briefs	105
Datamonitor Global Wealth Service Profiles	105
Do you need further information?	106
Datamonitor financial services consulting	106
SPP writing team	107
List of Tables
Table 1: Number of wealthy individuals in the UK segmented by asset band, 000s, 1997-2001	39
Table 2: Liquid assets of UK high net worth individuals, GBPm, 1997-2001	40
Table 3: UK High net worths segmented by source of wealth, 1997-2001	40
Table 4: Number of ultra high net worths segmented by liquid asset band, 2000-2001	41
Table 5: Source of wealth for UK ultra high net worths segmented by liquid asset band, 2000	42
Table 6: UK Ultra high net worths by source of wealth, 2000	43
Table 7: Age of high net worth earners and inheritors, 2000	43
Table 8: Age profile of UK ultra high net worth individuals against general adult population, 2000	44
Table 9: Average age of UK ultra high net worths, 2000	44
Table 10: Competitor profile summary, millionaires’ competitors	70
Table 11: Competitor profile summary, high net worth competitors	81
Table 12: Competitor profile summary, mass affluent competitors	92
Table 13: Market share of the top 10 companies competing in the UK GBP1m+ market, 2001	93
Table 14: Top 20 companies in the GBP1m+ market, minimum threshold versus average assets under management per client, 2001	94
Table 15: Market share of the top 10 companies competing in the UK GBP200k-1m market, 2001	95
Table 16: Top 20 companies in the GBP200k-1m market, minimum threshold versus average assets under management per client, 2001	96
Table 17: Market share of the top 10 companies competing in the UK GBP50k-200k market, 2001	97
Table 18: Top 20 companies in the GBP50k-200k market, minimum threshold versus average assets under management per client, 2001	98
Table 19: Companies included in the millionaires’ market shares	99
Table 20: Companies included in the high net worths’ market shares	100
Table 21: Companies included in the mass affluents’ market shares	101
List of Figures
Figure 1: The number of high net worths fell slightly in 2001, 1997- 2001	5
Figure 2: Competitor market shares in the GBP1m+ market, 2001	7
Figure 3: The top 10 best-performing hedge funds have significantly outperformed equity indexes, June 30 1999 – June 30 2002	22
Figure 4: ETFs have performed poorly, August 2001 – August 2002	25
Figure 5: MLIM’s third party distributors in the UK, June 2002	26
Figure 6: The number of high net worths fell slightly in 2001, 1997- 2001	30
Figure 7: The largest share of high net worth wealth is owned by those with between GBP200k and GBP300k of liquid assets, 1997-2001	31
Figure 8: Inheritors remain the largest of the indentified sub-groups, 1997-2001	32
Figure 9: The majority of UK ultra high net worths hold between GBP5-20m in onshore liquid assets, 2001	33
Figure 10: The number of UK UHNW individuals more than doubled 1997-2001	34
Figure 11: Source of wealth of UK ultra high net worths, 2000	35
Figure 12: Getting on in life- the majority of the ultra high net worth market is middle-aged, 2000	36
Figure 13: The average UK UHNW individual is in their 50s, 2000	37
Figure 14: Age profile, earners versus inheritors, 2000	38
Figure 15: The top 50 UK wealth managers held less than 35% of the GBP100k market in 2001	50
Figure 16: Competitor market shares in the GBP1m+ market, 2001	52
Figure 17: Competitor market shares in the GBP200k-1m market, 2001	55
Figure 18: Competitor market shares in the GBP50k-200k market, 2001	57

---