Private Banking and Wealth Management Survey 2013: A decade of private banking
Euromoney celebrates the 10th anniversary of its private banking survey this year. It has been a decade of changes driven by globalization and transparency. Despite a global financial crisis, a eurozone meltdown and a regulatory overhaul, the top-five global private banks have retained their standings.
Market volatility remained high in 2012 as the eurozone crisis intensified, fears persisted about China’s slowing growth, and the US offered its own uncertainties with an election and a fiscal cliff. For the world’s private banks, it was a continuing battle to find yield for clients and to protect their wealth from geopolitical risk – all in the face of increasing regulatory requirements and pressure to cut costs and increase revenues. The cost of compliance is 10% of the turnover of private banks and wealth managers, according to research by ComPeer. "With costs and the time that is required to be compliant with the tsunami of regulations that have been introduced over the last decade, only those truly committed are able to maintain a business today," says Bruce Weatherill, a private banking consultant and board member of ComPeer.
It is a marked change from when the first Euromoney private banking survey was published in January 2004. Back then the private banking industry was enjoying rapid growth. Survey participants reported growth in assets under management over 2003 to be 16.7%. This year participants reported annual AUM growth of just under 11%. In 2003, markets were reliably producing annual double-digit returns, M&A activity was everywhere, salaries were climbing and the biggest concern was how to keep a client’s money secret.