Lending for the wealthy |
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| The report discusses why lending should form an important part of the wealth manager's business before examining the three most suitable areas of lending for high net worths, including examples of wealth managers that are fulfilling this customer segments' needs in each area. Finally, seven conclusions to help wealth managers decide how best to capitalize on this important segment are presented. |
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Scope
In-depth interviews were carried out with senior executives within wealth managers that currently make lending a key part of their business
Extensive research on wealth managers, both in the US and Europe, to determine the extent to which lending products are marketed to high net worths
Highlights
According to IRS data, in the US, individuals with more than USD600,000 in net worth accounted for 70% of debt and mortgage balances, compared to 20% of balances held by people with positive net worth of less than USD600,000.
Despite the fact that wealthy individuals borrow a disproportionate amount of money relative to their numbers and that they are less likely to default on their loans than less wealthy individuals, relatively few wealth managers are capitalizing on this opportunity.
Most retail banks that started with lending capability now have wealth management businesses, giving them two important points of initial contact with a prospective client. Wealth managers that don't offer to manage their clients' liabilities are likely to lose clients to lending banks that can also manage their assets.
Reasons to Purchase
Assesses a very lucrative and underserved business segment that you can exploit
Identifies innovations in high net worth lending that can be adopted to fit your business model
Presents the key conclusions to help you decide whether high net worth lending is right for you |
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CHAPTER 1 LENDING FOR THE WEALTHY
Introduction
A wealth management proposition should include credit products for four reasons
HNW loan products allow companies to target relatively few clients but make relatively big revenues
And give wealth managers an excellent way to reach new customers
Where default is less likely than among mass market customers
And serious competition from wealth managers in this sector is still relatively sparse
Three areas of lending are particularly suitable for high net worth clients
Flexibility and vertical integration are the names of the game when it comes to offering loans to purchase assets such as houses, jets, yachts and art/collectibles
Short-term lending products like credit cards and bridge loans cover gaps
Lending for liquidity, whether secured by investment portfolios or landholdings, allows clients to leverage their assets
Conclusions
Wealth managers risk losing asset management clients to banks that can meet their lending needs
Wealth managers that want to build a lending business must be prepared to stick with it
It is possible, but not desirable to outsource lending
There is no such thing as long-term product differentiation in high net worth lending
The key to successful takeup of lending products by high net worth clients is Relationship Manager training
Interest rates do matter
Don’t forget the potential that SME lending offers
CHAPTER 2 APPENDIX
Research methodology
Definitions
Further Reading
Datamonitor Global Wealth Service SPP: Reports
Datamonitor Global Wealth Service SPP: Insight Reports
Datamonitor Wealth Management Competitor Tracker
Datamonitor Asia Pacific Wealth Management SPP: Reports
Datamonitor Savings & Investments SPP: Reports & Briefs
Datamonitor’s Global Wealth Model
SPP writing team
LIST OF TABLES
Table 1: Countries that can be modeled using Datamonitor’s Global Wealth Model
LIST OF FIGURES
Figure 1: High Net Worth individuals hold a significant portion of debt and mortgage balances in the US, 1998
Figure 2: UBS’s Art Banking proposition, April 2005
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| Typ: |
Marktstudie |
| Kategorie: |
Immobilienfinanzierung |
| Schwerpunkt: |
Marketing |
| Artikelnr.: |
BFFS0341 |
| Jahrgang: |
06/2005 |
| Anbieter: |
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| Umfang: |
27 Seiten, div. Abb.
und Tabellen
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