US High Net Worths 2004

US High Net Worths 2004

Introduction
 
As in many markets, the past few years have been a testing time for US wealth managers as both personal wealth and the resulting revenues have been hit by the global downturn and the bursting of the tech bubble. Since 2003 however, the situation has improved and this report examines the recent developments both in terms of market growth and competition to provide an insight into this key market.
 

 
Scope
 
Sizes and forecasts the number and aggregate onshore liquid assets of high net worth individuals in the US from 1998-2008 across five asset bands
 
Identifies the key competitors for those services and analyses the current competitive environment in the US
 
Utilizes Datamonitor's proprietary Global Wealth Model and in-depth interviews with senior executives from some of the top 15 US wealth managers
 
Highlights
 
There were 8.5 million individuals in the US holding onshore liquid assets worth in excess of USD300k in 2003, compared to only 7.3m individuals in 2002. However, the market has yet to return to its five year high of 8.9m individuals in 1999.
 

 
The US market has seen a significant degree of M&A activity over the last year, reflecting both the difficulties experienced during the past few years and the current growth ambitions of some of the more successful players. One the most active acquirers during 2004 has been Mellon, announcing a total of five wealth management acquisitions.
 

 
Over the next five years the HNW population in the US is expected to grow at a compound annual rate of 7.1%. The fastest growing liquid asset band is expected to be that of USD3m+, the population of which will increase at a compound rate of 10.3% over the next five years.
 

 
Reasons to Purchase
 
Identify how large the US wealth management market is and how much you could gain by entering the market
 
Identify the key US wealth managers, where you fit in among them and their current considerations with regard to competing in this market
 
Use the market sizing forecasts and key future trends to shape your US wealth management strategy going forward

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 4
 
Market context 4
 
Competitive dynamics 5
 
The future decoded 6
 
CHAPTER 2 INTRODUCTION 13
 
What is this report about? 13
 
Who is the target reader? 13
 
How to use this report 13
 
CHAPTER 3 MARKET CONTEXT 15
 
Introduction 15
 
Economic and financial drivers 15
 
The US High Net Worth market 18
 
Current size and composition 18
 
Historic growth 22
 
Regional income distribution 24
 
Data 26
 
Economic drivers 26
 
Market size 28
 
CHAPTER 4 COMPETITIVE DYNAMICS 32
 
Introduction 32
 
Key competitors 32
 
Competitive trends 35
 
Mergers and acqusitions 35
 
The emergence of a private banking model 44
 
From returns to risk assessment – shifting client attitudes 47
 
Regulation 49
 
CHAPTER 5 THE FUTURE DECODED 51
 
Introduction 51
 
Forecasted market size and composition 51
 
Key future trends and issues 53
 
Data 56
 
CHAPTER 6 APPENDIX 58
 
Definitions 58
 
Research methodology 59
 
Further Reading 59
 
Datamonitor Global Wealth Service SPP: Reports 59
 
Datamonitor Global Wealth Service SPP: Insight Reports 59
 
Datamonitor Global Wealth Service SPP: Competitor Tracking 60
 
Datamonitor Asia Pacific Wealth Management SPP: Reports 60
 
Datamonitor Savings & Investments SPP: Reports & Briefs 61
 
Datamonitor’s Global Wealth Model 62
 
SPP writing team 63
 

 
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LIST OF TABLES
 
Table 1: Real GDP annual growth, 1995-2003 26
 
Table 2: Stockmarket performance, actual and indexed 1995-2004 27
 
Table 3: Short-term interest rates, 1995-2003 27
 
Table 4: Unemployment and compensation rates, 1995-2003 28
 
Table 5: Proportion of wealthy individuals among the US adult population, 2003 28
 
Table 6: Proportion of total liquid assets held by wealthy individuals in the US, 2003 29
 
Table 7: Number of HNWs by liquid asset band, 1998-2003 29
 
Table 8: Value of HNW onshore liquid assets, 1998-2003 30
 
Table 9: Three-year-average median household Income by state, 2001-2003 31
 
Table 10: Top 25 US Wealth Managers, 2004 33
 
Table 11: Top 25 US Wealth Managers, 2004 continued 34
 
Table 12: US wealth management merger and acquisition activity, 2003-4 38
 
Table 13: US wealth management merger and acquisition activity, 2003-4 continued 39
 
Table 14: US wealth management merger and acquisition activity, 2003-4 continued 40
 
Table 15: US wealth management merger and acquisition activity, 2003-4 continued 41
 
Table 16: US wealth management merger and acquisition activity, 2003-4 continued 42
 
Table 17: US wealth management merger and acquisition activity, 2003-4 continued 43
 
Table 18: US wealth management merger and acquisition activity, 2003-4 continued 44
 
Table 19: Number of HNWs by liquid asset band forecast, 2003-2008 56
 
Table 20: Value of HNW onshore liquid assets forecast, 2003-2008 57
 
Table 21: Countries that can be modeled using Datamonitor’s Global Wealth Model 62
 

 

 
LIST OF FIGURES
 
Figure 1: HNWs account for only 4.1% of the total adult population in the US, 2003 4
 
Figure 2: The US is recovering following the 1999 to 2001 slowdown in real GDP growth 15
 
Figure 3: Stockmarket levels have returned approximately to their 2001 level 16
 
Figure 4: Short-term interest rates dropped to only 1.2% in 2003 17
 
Figure 5: HNWs account for only 4.1% of the total adult population in the US, 2003 19
 
Figure 6: HNWs account for almost half of liquid onshore assets in the US, 2003 20
 
Figure 7: The US now has more than 8.5m individuals with liquid assets worth in excess of USD300k 21
 
Figure 8: The US HNW population has witnessed a strong recovery in 2003 22
 
Figure 9: US HNW onshore liquid assets have returned to above their 2000 level 24
 
Figure 10: Households in New Jersey, Maryland and New Hampshire have the highest median income averaged over three years, 2001-2003 25
 
Figure 11: The number of US HNWs will reach 12m by 2008 52
 
Figure 12: The USD3m+ market will grow to USD3.7trn by 2008 53