Wealth Management in Germany 2011

Introduction

Clients lost a lot in the recession: returns, risk tolerance and confidence. Now in a rebuilding phase, wealth managers that understand their clients' demands and motivations are in the best position to profit. Datamonitor's analysis provides the data and insight to monitor competitors' strategies, size their potential customer base, and understand their needs.

Features and benefits

* Build your customer targeting strategy using in-depth HNW demographics and needs analysis based on Datamonitor's annual Global Wealth Manager Survey.
* Assess your competition through detailed profiles of notable players, including the customer targeting, marketing and product strategies they employ.
* Size your potential client base using Datamonitor's proprietary data, presenting the number of affluent individuals by liquid asset band to 2014.

Highlights

There were more than 10.5 million mass affluent individuals in Germany as of the end of 2007, which was the largest mass affluent population in Western Europe, meaning that the country's banks had a significant segment to target. But the financial crisis reduced the German mass affluent population by 1.3 million individuals by the end of 2009.
The typical German HNW individual is male, over 50 years of age, and earned his wealth through entrepreneurship. Judging by his portfolio he is conservative, choosing to allocate the highest proportion of his liquid wealth to bonds, and he sees real estate as a safe investment. Because of his interest in real estate, mortgages are in high demand.
Deutsche Bank, Commerzbank (now incorporating Dresdner Bank), and the UniCredit-owned HVB are the so-called "big" banks in Germany, and all three offer extensive wealth management services. In addition, there are a number of foreign private banks including venerable Swiss wealth managers such as Credit Suisse, Julius Baer, Lombard Odier and UBS.

Your key questions answered

* What strategies are my competition employing to win and keep affluent clients?
* Which products and services will affluent clients in Germany want in the next two years?
* How is the German wealth management structured? What role do banks and asset managers play?
* How many potential clients in Germany have onshore liquid assets that would allow me to run a very profitable business?
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Executive Summary
Germany's strong manufacturing base pulled it through the recession, and its affluent population is now on the rise
There are 1.3 million fewer German mass affluent individuals than there were before the financial crisis
Germany's mass affluent population will recover by 2014
German HNW individuals are typically older, entrepreneurial, and conservative
Three banking pillars vie for German affluent wealth
Several of the country's public banks offer separately branded private banking services
Dozens of long-established German private banks ply their trade in the country
The big banks and a number of foreign banks provide global wealth management services
OVERVIEW
Catalyst
Summary
Methodology
SIZING AND FORECASTING THE AFFLUENT MARKET IN GERMANY
Introduction
Macroeconomic overview
Recent trends and performance
GDP
Real GDP growth
Inflation
Long-term and short-term interest rates
Stock market capitalization
Income distribution and inequality
Regulation of wealth management in Germany
Key institutions and players
Recent legislation and regulatory developments
Sizing the onshore affluent population
There are 1.3 million fewer German mass affluent individuals than there were before the financial crisis
The liquid assets held by the German mass affluent population have not yet recovered from the financial crisis
Forecasting the onshore affluent market
Germany's affluent population will recover to 2014
Mass affluent German individuals will see their portfolios grow robustly up to 2014
The offshore market
Switzerland is an important destination for German wealth
German prosecutors are putting pressure on offshore markets
HNW CUSTOMERS IN GERMANY
The German investor is typically older, entrepreneurial, and conservative
More than 80% of German HNW individuals are over 50
Women account for less than 30% of German HNW individuals
The majority of HNW individuals amassed their fortunes through entrepreneurship
German HNW individuals typically invest in less risky assets
In broad asset class terms, German HNW investors have the largest proportion of their portfolio in fixed income products
Detailed asset class analysis shows German HNW individuals favor non-correlated investments
German HNW individuals will only reallocate their funds slightly within the next two years
There is high demand for financial planning among German HNW individuals, but credit cards will become increasingly important over the next two years
German wealth managers are missing the mark in terms of mortgages, personal loans, and margin lending
German HNW individuals prefer a certain amount of "hand-holding," but are not demanding full discretionary wealth management
Borrowing is not a key priority among HNW individuals, with the exception of mortgages
The next two years will not see increased credit demand from German HNW individuals
German HNW individuals currently have a strong appetite for advisory and financial planning services
Interest in pensions among the German HNW population is set to increase
German HNW individuals are not as financially sophisticated or loyal as their Western European peers
German HNW individuals expect face-to-face contact
German HNW individuals are not overly loyal, and tend to use more than one wealth manager
The majority of German HNW investors hold 51–70% of their portfolio with one wealth manager
German investors are not overly loyal to their wealth manager, yet are unlikely to leave them
Existing client referrals are the most effective means of customer acquisition
Credit Suisse's One Bank strategy is reaping significant rewards
COMPETITOR DEVELOPMENTS IN GERMAN WEALTH MANAGEMENT
Introduction
Business models of Germany's wealth managers
Germany's retail banking system
Germany's asset managers
The German wealth management market is predominantly banking led, with a sharp split in market share according to wealth level
Competitor trends
Consolidation has been the watchword in German wealth management over the past few years
Key competitors in German wealth management
Several of the country's public banks offer separately branded private banking services
Dozens of long-established German private banks ply their trade in the country
The big banks and a number of foreign banks provide global wealth management services
Asset management market shares
Competitor profiles
Bankhaus Lampe
Quirin Bank
NORD/LB Private Banking
Deutsche Bank Private Wealth Management
HVB Private Banking
APPENDIX
Definitions
High net worth (HNW)
Liquid assets
Mass affluent
Measures of growth
Onshore
Methodology
Overall methodology
Global Wealth Model Methodology
Global Wealth Managers Survey 2011
Offshore Banks Survey 2010
Further reading
Selected bibliography
Ask the analyst
Datamonitor consulting
Disclaimer
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