Professional Documents
Culture Documents
Wealth Management
Quote:
“Let me tell you about the very rich” (with undisguised envy). “They’re very different
from you and me.”
F. Scott Fitzgerald
Questions
1. Describe the key factors driving the growth in the wealth management market.
A key driver of the wealth management market is clearly the growth of wealth itself
and how it is distributed.
In principle, the revenues of most financial services are driven by ‘surplus’ wealth.
Asset Prices
- The 1900s surge in wealth largely due to the biggest ever bull market in
equities.
- A shift of investable wealth from illiquid asst to the market.
- Many family-owned companies have been sold, including growing number
through IPO.
Demographic factors
- The age group generally mattered most to the industry from the growth
perspective is those aged 46065 (the baby boomers) – these are the people
who are the most likely to accumulating wealth for retirement.
- Economic and technological change has been driving the recent growth in
HNWI wealth led to changes in profile of wealthy individual. Entrepreneurial
wealth has become increasingly important.
- A redistribution of existing wealth through inheritance-related wealth transfer.
Much of the region’s wealth has traditionally been held offshore (‘petrol dollars’).
Most recently, the region is experiencing wealth generation primarily driven by
the growth in oil revenues.
Mckinsey estimates that close to half of new wealth is currently staying onshore,
with half of that wealth invested in local equity markets.