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Bank of America has toppled crisis-hit UBS as the world's biggest wealth manager as the industry faces shrinking wealth and another tough 12 months, a survey showed on Monday.
Private wealth managed by banks and investment managers around the world dropped nearly 17 percent to $14.5 trillion in 2008 from a year earlier, a survey by specialist consultancy Scorpio Partnership of 14,000 private bankers and 7,000 wealthy individuals showed on Monday.
The drop in managed wealth, the first since 2002, highlights the industry pressures of the global financial crisis and weakening bank secrecy in offshore centres after years of buoyant growth.
Scorpio predicts another very tough 12 months for those market players who fail to address current challenges.
"2009-2010 will be a moment of truth for the global private banking model," said Managing Partner Sebastian Dovey.
"The way through will be an intelligent focus on profitable segments and efficiency drives." Bank of America [BAC
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] rose to become the world's largest bank to the rich after taking over Merrill Lynch [MER
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] last year and managed at the end of 2008 $1.5 trillion of private clients' assets.
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Sharon Lorimer |
UBS has suffered massive outflows at its core wealth management division after losing billions of dollars in the subprime crisis.
Its brand has also been hit by a high-profile tax fraud litigation in the United States.
Despite its many woes it still managed to hold the second position with $1.394 trillion.
Not So Fragmented
The survey showed that wealth was still concentrated in the United States and in the hands of a few players, defying a perception that the sector is overly fragmented.
The top 20 global private banks manage nearly $9.2 trillion, or more than a half of global private client assets, the survey showed.
"Market fragmentation as a characteristic of the industry is hugely overstated," Dovey said.
Despite shrinking assets, the industry continued to add headcount and there was a 6 percent rise in new hires, with far more firms hiring than firing staff.
Following are the top 10 wealth managers and their assets under management in billions of dollars, according to the survey:
Top 10 Wealth Managers |
| Rank | Bank | Assets |
| 1 | Bank of America | 1,501 |
| 2 | UBS | 1,393 |
| 3 | Citi | 1,320 |
| 4 | Wells Fargo | 1,000 |
| 5 | Credit Suisse | 612 |
| 6 | JPMorgan | 552 |
| 7 | Morgan Stanley | 522 |
| 8 | HSBC | 352 |
| 9 | Deutsche Bank | 231 |
| 10 | Goldman Sachs | 215 |
Source: Scorpio Partnership |
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