EXECUTIVE SUMMARY
Discretionary mandates remain the domain of developed markets
Key findings
Critical success factors
SIZING THE GLOBAL MARKET FOR DISCRETIONARY ASSET MANAGEMENT
Defining discretionary asset management
Wealth managers offer a range of asset management solutions to cater for HNW investors
Globally, 51.9% of HNW wealth is placed in discretionary mandates
HNW investors in Asia Pacific show the weakest preference for discretionary asset management
The penetration of discretionary is higher in developed markets
Discretionary asset management has only started developing in emerging markets
The global HNW discretionary asset management market is worth $15.7tn
The value of the market will continue to expand with the growth of HNW assets
In regional terms, the US represents the largest opportunity
Wealth managers will be trying to win a share of the Chinese market
Demand for professional advice will increase, partially encouraged by market volatility
However, wealth managers expect higher demand for advised rather than discretionary mandates
Increased demand for discretionary portfolio management will come from investors already familiar with the service
Mass affluent investors show a higher tendency to self-direct
DRIVERS FOR DISCRETIONARY ASSET MANAGEMENT
Discretionary mandates appeal to inheritors
Inheritors have been driving discretionary asset management
Intergenerational wealth transfer takes time
Motivations for using discretionary services vary between markets
In general, clients lacking time or expertise value discretionary mandates
European HNW investors are particularly time-constrained
A search for better returns is key in North America
Establishing trust is key in the Middle East and Africa, while investors in Asia Pacific are attracted by exclusivity
The high cost of discretionary asset management can deter HNW investors
UNDERSTANDING THE COMPETITIVE LANDSCAPE
Wealth managers offering discretionary mandates compete with a range of players
Most HNW-focused competitors provide discretionary asset management
In Europe, most "robo-advisors" are in fact discretionary investment managers
A range of discretionary options remain available for smaller investors
Fee models vary, though there is increasing pressure for transparency
Increasing mandates penetration forms the center of many wealth managers’ strategies
Major players will continue to move clients to discretionary services
Boutique wealth managers will highlight their greater flexibility
APPENDIX
Definitions
Developed (mature) economies or markets
Developing (emerging) economies or markets
HNW
Liquid assets
Mass affluent
Mass market
Robo-advisor
Supplementary data
Methodology
Sizing the market for discretionary asset management
Verdict Financial’s 2016 Global Wealth Managers Survey
Verdict Financial’s 2015 Global Wealth Managers Survey
Verdict Financial’s 2016 Retail Banking Insight Survey
Exchange rates
Bibliography
Further reading
About Verdict Financial
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