Private bankers gathering in Singapore
for Private Banker International’s Wealth Summit this month
rejected suggestions that an emerging ‘super league’ of wealth
management giants will significantly limit the number of other
competitors.

More than 50 percent of conference delegates doubt that wealth
management giants such as UBS, Merrill Lynch and Citigroup, all
with more than $1 trillion of assets under management, will make it
increasingly difficult for other players to build significant
market share.

But 40 percent of these questioned in the industry poll still think
this gravitation towards the giants is a real danger, particularly
as the current uncertain investment environment triggered by the
subprime crisis will force clients to look closely at their
investments risk profiles.

In fact, the 200 conference delegates, responding to a PBI poll on
current major wealth issues, overwhelming agreed with the
proposition that private banking will need rapidly to update the
quality of its overall advisory services. This is required to meet
the growing sophistication of clients in all geographies as well as
produce above-average returns at a time of less buoyant
markets.

These trends promise to create further competitive pressures on the
wealth management industry, disadvantaging those players unable to
meet the challenge of upgrading their advisory and discretionary
services.

Most private bankers questioned also believed the crisis of
confidence caused by the subprime debacle is going to make it
important to persuade clients to expect lower returns in
future.

Most think the average total return expectation should be lowered
to between 10 percent to 8 percent, far below some of the handsome
returns on portfolios of recent years, particularly in high-growth
Asia.

But where delegates overwhelmingly reached consensus was on the on
the issue of wealth industry consolidation. More than 90 percent
agreed that Asia, Europe and the US will see many more acquisitions
of private banking companies, as the shortage of talent, the
slowness of organic growth and the cost of acquiring new clients
make M&A the only practical way to build market share.

The results of the PBI Forum Poll, conducted at our 17th Wealth
Summit on 17-18 September, are presented below.