Private banks have £10.9 trillion but can’t beat stocks
PRIVATE banking firms now manage assets worth £10.9 trillion, a rise of £1.3 trillion since last year, though many firms fall behind the stock market in the profit stakes, a report claimed yesterday.
Assets under management (AUM) rose 17 per cent on last year, though performance markers on efficiency have fallen 35 per cent, according to a survey by consultants Scorpion.
The top ten table remains largely static, with Bank of America firmly at the top with 10 per cent of all manageable assets under its control.
Royal Bank of Canada is the only new entrant to the top ten, after it opened up its financial reports. Swiss bank Pictet returns to the list after two years outside.
However, wealth managers have performed worse on average than the stock market. The MCSI world stock index rose 27 per cent in 2009, compared to annual returns of 17 per cent in the private banking industry.
“The wealth management engine is still misfiring for many. There are strong signs of wealth creation even in these complex markets and yet new clients are holding back from opening accounts with the industry,” said Scorpion managing partner Sebastian Dovey.
The research showed over 220 institutions currently offering a private banking service.
“We feel it is time the fashion to retain the cottage industry perception is laid to rest,” said managing partner Catherine Tillotson. “Those businesses that cling on to the past are likely to be marginalised rapidly.”
TOP TEN GLOBAL PRIVATE BANKS BY ASSETS UNDER MANAGEMENT (SOURCE: SCORPIO)
2010 BENCHMARK AUM (USD BN) 2009 BENCHMARK AUM (USD BN)
1 BANK OF AMERICA 1,740.51 1,501.00
2 UBS 1,593.74 1,393.48
3 MORGAN STANLEY 1,508.00 522.00
4 WELLS FARGO 1,218.00 1,000.00
5 CREDIT SUISSE 775.43 611.96
6 JP MORGAN 636.00 522.00
7 ROYAL BANK OF CANADA 379.00 NEW ENTRANT
8 HSBC 367.00 352.00
9 DEUTSCHE BANK 272.38 231.19
10 PICTET 243.21 NEW ENTRANT