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February 22, 2005 at 07:00 PM
LONDON (HedgeWorld.com)–Wealthy folks may not be going for brokers as much as they used to. The shaky condition of the traditional investment market in recent years is steering high-net-worth individuals away from a transactional model of investment and toward a more comprehensive, private banking-centered approach, according to a survey and report by Datamonitor.
The United States has about 8.5 million high-net-worth individuals (“HNWs,” defined as persons with onshore liquid assets in excess of US$300,000), and their number will grow to 12 million by 2008, at an annual rate of 7%, according to Datamonitor. Liquid wealth of HNWs increased from US$6.3 trillion in 2002 to US$7.7 trillion in 2003–the latest dollar figure pegged by Datamonitor–a year in which the U.S. HNW population grew by 16.3%.
According to Datamonitor, the U.S. wealth management domain has had to undergo a structural shift to accommodate wealthy investors’ response to faltering markets. “While the United States has historically been very brokerage-focused,” according to the Datamonitor report, “U.S. HNWs are increasingly demanding a holistic, integrated view of their lives, resulting in a consolidation of their relationships and transfer of a greater share of wallet to their wealth managers.” Major U.S. wealth managers are adapting to this new attitude and market by “broadening their product and service offering to provide a more comprehensive service and to differentiate themselves from the competition.”
