Loading ...Book - Wealth Management in Brazil 2009
Brazil has never been an easy market for international wealth managers, and in the last 12 months it has become even tougher. Private banks need to appreciate the challenges that this market presents and understand where the strategic opportunities lie. This report provides this information, drawing on research and interviews and incorporating data from the Global Wealth Model.
Scope of this research:
- Sizes, segments and forecasts the number of affluent individuals across 10 liquid asset bands from USD50k
- Primary research among domestic wealth managers provides insight into HNWs and the private banking market
- Utilizes the proprietary Wealth Management Opportunity Index to score the attractiveness of the market
Research and analysis highlights:
- Brazilians are very exposed to their domestic stock market because of their large equity and mutual fund holdings. In the years leading up to 2008, this positioning served them well, but last year crashing markets caused a dramatic contraction in the number of affluents in the country, reducing them by 55%.
- In the wake of the market’s falls, there was a rise in demand for more defensive products among Brazil’s high net worths (HNWs), but at heart they remain risk loving individuals who favor fairly simple asset allocations. The country’s HNWs are becoming more demanding of their wealth management service.
- For international players, the onshore wealth management market in Brazil is difficult to penetrate and hard to compete in. Success requires a well-developed proposition, real points of differentiation and an intelligent plan for client acquisition. Service quality and excellent client information are two points of possible differentiation.
Key reasons to purchase this research:
- Understand Brazilian HNWs’ attitudes and investment behaviour, and reasons for choosing/leaving their wealth service.
- Gain insight into the competitive characteristics of the Brazil wealth management market, and learn the factors for success.
- See how the Brazil wealth management market scores against the Opportunity Index.
Table of Contents
OVERVIEW
Catalyst
Summary
Methodology
EXECUTIVE SUMMARY
2008 was a very painful year for Brazil’s investors, although the good times will resume from 2009 onwards
HNWs are still risk loving, but they are becoming more sophisticated and demanding
The wealth management market in Brazil is well-developed and competitive
International wealth managers need to treat this market cautiously and think hard about their differentiators
BRAZIL’S WEALTH
Brazil’s economy proved resilient right up to 2009 and should return to its high-growth ways in the coming years
Brazil’s stock market was not as badly affected as other BRIC countries in 2008, and has come back strongly in 2009
Relatively high interest rates have bolstered Brazilians’ wealth
The importance of equity in Brazilians’ portfolios has grown rapidly over the past few years
In 2007, Brazilian investors had more onshore liquid assets in equities than in deposits
2008 marked a painful year of losses for Brazil’s wealthy, but 2009 will put them well on the road to recovery
The number of affluents in the country fell by 55% last year due to the sharp fall in the financial markets
BRAZIL’S WEALTH MANAGEMENT MARKET
It is becoming increasingly difficult for international wealth managers to enter and succeed in Brazil’s wealth management market
The Wealth Management Opportunity Index
Wealth management market features
Wealth management client characteristics
APPENDIX
The Wealth Management Opportunity Index
There are five key parameters when assessing a market for its wealth management potential
There are 18 components to the five key parameters of the wealth management opportunity index
Definitions
The drivers of growth in the wealthy population
- Income growth (combined with inflation, changes in GDP by sector, household savings rates and debt levels)
- Investment returns (market capitalization, interest rates and bond yields)
The following measures are not, in themselves, drivers of wealthy population growth
- Market capitalization
- GDP
The following measures are not drivers of wealthy population growth except under very restricted circumstances
- Primary residence value growth
- Inheritance
METHODOLOGY
Global Wealth Model
Bibliography
Further reading
Ask the analyst
Disclaimer
TABLES
Table: Financial assets of Brazilian retail investors
Table: Value of onshore liquid assets in Brazil in dollar bands ($bn)
Table: Forecast value of onshore liquid assets in Brazil in dollar bands ($bn)
Table: Number of individuals in Brazil in dollar bands (000s)
Table: Forecast number of individuals in Brazil in dollar bands (000s)
Table: Wealth Management Opportunity Index – Brazil
Table: Wealth Management Opportunity Index with values – Brazil
Table: Global ranking of assets under management (October 2008)
Table: Distribution by fund type (October 2008)
Table: Types of assets managed by the largest asset managers in Brazil
Table: Brazil’s banks by nature, ownership and size (March 2009)
FIGURES
Figure: Growth in average nominal wages has occurred in a low inflationary environment
Figure: The stock markets of the BRIC countries have bounced back strongly in 2009
Figure: Interest rates have fallen sharply over the past few years, but do offer good returns relative to inflation
Figure: The 2008 fall in the stock market had serious consequences for the wealth of Brazilians
Figure: The relative proportion of equities held by Brazilian investors ballooned in 2007 and popped in 2008
Figure: Brazilians have embraced a number of different fund types
Figure: The Brazilian Real has strengthened against the US dollar of late
Figure: A number of factors point towards the likely movement of money back onshore
For more information visit
http://www.researchandmarkets.com/research/a36b42/wealth_management
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