Private banking: Pure-play funds plough through private client opening
The world’s leading private banks still haven’t resolved the conflict between advising their clients and investing their assets. A decade ago, many wanted out of asset management. Now they want back in. The ensuing confusion has left a gap that pure-play asset managers are finally beginning to fill.
Which firm is best at managing assets of the world’s wealthiest individuals? According to the private banks that voted in Euromoney’s 2016 private banking and wealth management survey, it is not a wealth manager, it is a pure asset manager: BlackRock. Indeed, more than any other year in the decade-plus history of the survey, this time traditional asset managers have been recognized for their products and services to the wealth management industry. Aberdeen Asset Management ranks sixth globally for asset management. Fidelity and Schroders join Aberdeen and BlackRock in the top 10 for asset management in western Europe. In North America Pimco and Alliance Bernstein rank in the top 10. In Asia, alongside those mentioned already, Franklin Templeton appears.
Asset management was once seen as the core of wealth management. In the early 2000s private banks were building in-house asset management capabilities to complement their advisory and trust businesses. Yet banks have struggled to find the right model. Do they provide in-house asset management within wealth management? Do they separate the business units entirely as captive asset managers? Or do they get rid of asset management altogether to spare themselves the headache? Over the last seven years, they seem to have tried it all.