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July 23, 2009updated 04 Apr 2017 3:56pm

Reality starts to bite in the UHNW space

Ultra high net worth has been an industry buzzword in the last year, but there are signs the segment may not be able to support the growing number of firms setting up businesses in the area.While there has been a steady shift up the asset pyramid, research shows that the most profitable area for wealth management firms remains in the $500,000 to $20 million segment, generally considered simply high net worth (see page 11).This was one of many issues discussed at PBIs roundtable on business models, held recently in London (see pages 6-9).The main conclusion was that wealth management is an industry large enough for many businesses to co-exist There remain concerns about the ability for private banks to provide truly independent advice because they are often linked to asset management units and other product houses.That conflict means maintaining the integrity of the relationship between client and private banker is vital at these institutions This tension is what lies behind the emphasis in the industry to promote or to be seen to promote open architecture.And for this to be credible, private banks need to prove their clients are getting access to best in class products across all institutions, rather than paying lip service to the idea

By PBI Editorial

Ultra high net worth has been an industry buzzword in the last year, but there are signs the segment may not be able to support the growing number of firms setting up businesses in the area.

While there has been a steady shift up the asset pyramid, research shows that the most profitable area for wealth management firms remains in the $500,000 to $20 million segment, generally considered simply high net worth (see page 11).

This was one of many issues discussed at PBI’s roundtable on business models, held recently in London (see pages 6-9).

The main conclusion was that wealth management is an industry large enough for many businesses to co-exist. There remain concerns about the ability for private banks to provide truly independent advice because they are often linked to asset management units and other product houses.

That conflict means maintaining the integrity of the relationship between client and private banker is vital at these institutions. This tension is what lies behind the emphasis in the industry to promote or to be seen to promote open architecture.

And for this to be credible, private banks need to prove their clients are getting access to best in class products across all institutions, rather than paying lip service to the idea.

It is a tough commitment at a time when margins are being squeezed, but one which will become more and more important in this new era of transparency.

PBI ROUNDTABLE

Participants

• Anthony Burrell, investment manager, Mirabaud Investment Management

• Andrew Fisher, CEO, Towry Law

• Markas Gilmartin, managing financial consultant, AWD Chase de Vere

• David Maude, independent consultant

• Josh Matthews, managing partner, Maseco Financial

• Warwick Newbury, chairman, SG Hambros

• Rupert Phelps, director of family office services, BNY Mellon

• David Poole, UK head, Citi Private Bank

• David Scott, CEO, Vestra Wealth

• Matthew Spencer, head of intermediaries, Credit Suisse, UK private bank

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