Capturing Growth: Wealth Management for the Ultra-Rich

The increasing value of High Net Worth Individuals (HNWI) suggests financial services firms are endeavouring to gain increased coverage of this lucrative market. Oxfam says it expects 2016 to see over 50% of the world’s wealth being owned by the richest 1%. Banks with strength in this marketplace, most notably Swiss institutions, are ensuring that new products are increasingly available in both the retail and investment banking markets. This coupled with huge internal resource being assigned to identifying, tracking and recording HNWI’s is evidence enough to suggest that the global banks and asset managers are as active as ever in this space.

The regulatory environment clearly is and will continue to both impact and influence all areas of banking business and it appears that the private banking and wealth management sectors are not immune.

MiFID II may prove to have the greatest impact in this sector, by allowing asset managers to utilise the banks’ distribution platforms through sub-advisory channels. Furthermore, there is a risk that the forthcoming ring fencing regulations may impact the banks’ ability to service their private banking clients. If the banks are limited in their ability to share products and information between banking lines, they are at risk of HNWI’s migrating their business to the dedicated asset managers and independent private wealth managers.

As with all forthcoming regulatory reforms only time will tell as to the impacts, but what we can be certain of is the importance to banks and other financial service firm’s attention being focussed on their private wealth clients as much as their large institutional ones. It seems that with the constantly developing regulatory landscape, the legal guidelines and when relevant legal advice around commercial implementation could be crucial in the private banking market which is a market that is only increasing in size and importance globally.

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