The global wealth management industry is stagnating as net new
money drops and cost-income ratios climb, consultancy Scorpio
Partnership has warned.
Scorpio’s Global Private Banking Benchmark 2011 report
said the industry is stuck in neutral as inflows of net new money
dropped 18.8% year-on-year at the same time as cost-income ratios
averaged 79.76%.
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The findings echo research from Boston Consulting Group, PwC and
Capgemini that point to continued margin pressure driven by higher
operating costs, pricing and increasing client demands.
Scorpio Partnership managing partner and head of research
Catherine Tillotson said new clients appeared to be holding off
taking on wealth management services.
“The lag felt by an on-going inability to tackle rising costs
and uncertainty from clients as to the value of the industry
continues to shape weaker than necessary performance when you
consider the strong growth in personal fortunes in many markets,”
she said.
Scorpio’s survey of 200 wealth managers found assets under
management (AuM) grew 11.12% in 2010.
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By GlobalDataScorpio said the positive performance of international markets
was the main factor behind the industry’s collective AuM rise.
On a more positive note, average incomes increased 8.97% and
average profits jumped 15.42%.
