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Report Predicts Bright Future For Global Wealth Management Industry

by Carla Johnson, Invesotrs Offshore.com

14 December 2004


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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