Report Predicts Bright Future For Global Wealth Management Industry
A research report by the Boston Consulting Group claims that global asset managers
could increase the value of their portfolios by as much as 9% compounded over
the next five years, provided firms manage their businesses effectively.
Entitled ‘A Restless Recovery: Global Asset Management 2004’ which
was partly based on a survey of 50 wealth managers overseeing some $9 trillion
in assets, BCG concluded that management firms must hone their brand identities,
streamline product portfolios and manage distribution and cost whilst improving
the relationships with clients in order to maintain this growth. According to the report, assets under management in the global industry rose
by 14% to $37 trillion in 2003, although
BCG warned that more conservative equity strategies and a higher emphasis on
integrity were called for if firms are to remain competitive. Nevertheless, BCG forecast a sharp rise in average industry profit margins,
to as high as 40% if its best scenario is met. This compares to their
2003 level of 31%. However the report observed the likelihood that cost will rise, driven by consumer
demand for a broader range of investments, the emergence of new platforms facilitating
third party access and internet access. "About one-third of major global players have developed and embraced most
of the industry's best practices," noted Andy Maguire, the principal author
of the report and a director of BCG. "But it will be just as big a struggle for superior players to stay on
top as it will for middle and bottom-tier players to close the performance gap,"
he predicted. A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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