The global wealth-management industry managed $20.6 trillion in investible assets on behalf of high net worth investors at the end of December 2014. The top 10 global operators collectively managed 47% of the market, with UBS controlling 9.9%, according to an annual study by London-based consulting firm Scorpio Partnership.
Assets under management (AuM) for the over 200 wealth mangers increased 3.4% and their operating profits improved by an average of 3.3%.
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However, these figures were tempered by continued pressure on the operating efficiency measured by cost-income ratios. In the latest report the industry average rose 90 basis points to 84.4%, the report says.
Scorpio Partnership managing partner Sebastian Dovey said: "The operating model is facing major growing pains to accommodate the expectations of financial groups for wealth management divisions to deliver sustained high margin results.
"The good news is client volumes and demand for wealth services are strengthening for many. But the bad news is the industry is still tackling major compression factors in terms of costs versus income. Some are not moving quickly enough with rates of growth slowing," Dovey added.
According to the report, for the first time AuM figures of UBS and Morgan Stanley broke through the $2 trillion barrier.
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By GlobalDataUBS, which managed $2.04 trillion at the end of 2014, was ranked first for the third straight year, while Morgan Stanley ranked second with $2.03 trillion.
The most notable step change was posted for BMO Financial Group which rose 10 places to 11th, as acquisitions helped assets surge 80% to $326.4bn.
The annual Scorpio Partnership Private Banking Benchmark, which now in its 14th year, forecasts that based on growth projections it is likely that Bank of America Merrill Lynch will pass the $2trn hurdle in the coming 12 months.
A number of firms – mostly headquartered in Europe – have been adversely affected by the currency performance of the Euro, the report said.
BNP Paribas and HSBC, which registered 6.2% and 4.5% decline in AuM respectively, were ranked eighth and ninth globally.
"Looking ahead, in the intensively competitive market it will be the details that make the margin of difference. The winners will be those that pay the most detailed attention to the optimised commercialisation of the client journey and benchmarking this among peers. Aside from the annual benchmarking, our unique collation of HNW and UHNW client satisfaction ratings of firms identifies who is leading in this context," Dovey said.
