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2020 Foresight: Branding

and Segmentation in Wealth

Management

Product Code: WI0001FR

Published Date: April 2013

TABLE OF CONTENTS

2020 Foresight: Branding and Segmentation in Wealth Management Page 2

© Timetric. This product is licensed and is not to be photocopied Published: April 2013

TABLE OF CONTENTS

1 Executive Summary .............................................................................................................................. 7 2 Global Snapshot .................................................................................................................................... 9

2.1 Global Market Segmentation Snapshot ................................................... Error! Bookmark not defined.

2.2 Regional Market Size and Forecast ........................................................ Error! Bookmark not defined.

2.3 Branding and Marketing Strategies ....................................................................................................... 10

3 Asia Pacific ........................................................................................................................................... 11

3.1 Regional Market Segmentation Dynamics .............................................. Error! Bookmark not defined.

3.1.1 Overview .................................................................................................. Error! Bookmark not defined.

3.1.2 Regional dynamics by key countries ....................................................... Error! Bookmark not defined.

3.1.3 Analysis of HNWI consumer attitudes and behavior towards investment Error! Bookmark not defined.

3.1.4 Asset allocation........................................................................................ Error! Bookmark not defined.

3.1.5 Key trends and drivers ........................................................................................................................... 12


3.2.1 By volume of HNWI customers ................................................................ Error! Bookmark not defined.

3.2.2 By value of HNWI wealth ......................................................................... Error! Bookmark not defined.

3.2.3 HNWI segmental analysis by key countries ............................................ Error! Bookmark not defined.

3.2.4 Investable wealth analysis by key countries ............................................ Error! Bookmark not defined.


3.3.1 Branding strategy..................................................................................... Error! Bookmark not defined.

3.3.2 Targeting strategies ................................................................................. Error! Bookmark not defined.

3.3.3 Product launch strategy ........................................................................... Error! Bookmark not defined.

3.3.4 Customer retention strategies ................................................................. Error! Bookmark not defined.

3.4 Branding and Segmentation Case Studies ........................................................................................... 14

3.4.1 DBS Bank redefines its marketing and branding strategy to expand presence across Asia ................ 14

3.4.2 HSBC – Rebranding as a strategy to emphasize wealth management businessError! Bookmark not defined.

3.4.3 ICICI BANK .............................................................................................. Error! Bookmark not defined.

4 The Americas ....................................................................................................................................... 16













4.3.2 Targeting strategy .................................................................................... Error! Bookmark not defined.

4.3.3 Product strategy....................................................................................... Error! Bookmark not defined.

TABLE OF CONTENTS





4.4.1 TD Canada Trust branding strategy via social media ........................................................................... 20

4.4.2 US Trust ................................................................................................... Error! Bookmark not defined.

4.4.3 UBS Bank ................................................................................................ Error! Bookmark not defined.

5 Europe .................................................................................................................................................. 22









5.2.2 By value of HNWI wealth ......................................................................... Error! Bookmark not defined.



5.3 Branding and Marketing Strategy .......................................................................................................... 24


5.3.2 Product strategy....................................................................................... Error! Bookmark not defined.

5.3.3 Targeting strategy .................................................................................... Error! Bookmark not defined.



5.4.1 Deutsche Bank ...................................................................................................................................... 25

5.4.2 Erste Group Bank .................................................................................... Error! Bookmark not defined.

6 Appendix .............................................................................................................................................. 26

6.1 Methodology .......................................................................................................................................... 26

6.2 Definition ................................................................................................................................................ 27

6.3 Background ............................................................................................................................................ 28

6.4 Contact Us ............................................................................................................................................. 28

6.5 About Timetric ........................................................................................................................................ 28

6.6 Disclaimer .............................................................................................................................................. 29

LIST OF FIGURES



LIST OF FIGURES

Figure 1: Global Snapshot of HNWI Wealth and Population, 2012 ............................................................................................................... 9 Figure 2: Marketing Process in Wealth Management .................................................................................... Error! Bookmark not defined. Figure 3: Market Segmentation and Scope of Business ................................................................................ Error! Bookmark not defined. Figure 4: Linear Segmentation – The Global Wealth Pyramid ....................................................................... Error! Bookmark not defined. Figure 5: Potential Client Segmentation and Client Requirements ................................................................ Error! Bookmark not defined. Figure 6: HNWI Client Requirements Based on Stage of Wealth .................................................................. Error! Bookmark not defined. Figure 7: Global Number of HNWIs (Million), 2008–2012 .............................................................................. Error! Bookmark not defined. Figure 8: Total Number of HNWIs in Various Regions of the World (Million), 2008–2012 .............................. Error! Bookmark not defined. Figure 9: Value of Global HNWI Wealth (US$ Trillion), 2008–2012 ............................................................... Error! Bookmark not defined. Figure 10: Branding Strategies Adopted by Domestic and Foreign Players ................................................................................................ 10 Figure 11: Winning and Regular Marketing Strategies .................................................................................. Error! Bookmark not defined. Figure 12: Snapshot of Asian HNWI Wealth and Population, 2012 ............................................................................................................ 11 Figure 13: Different Approaches to Market Segmentation Adopted by Wealth Market Players ...................... Error! Bookmark not defined. Figure 14: Asset Allocation in Leading Markets (US$ Million), 2012 .............................................................. Error! Bookmark not defined. Figure 15: Market Segmentation by Source of Wealth .................................................................................. Error! Bookmark not defined. Figure 16: Women HNWI Investor Behavior ................................................................................................. Error! Bookmark not defined. Figure 17: HNWI Regional Distribution in China and India, 2011 .................................................................. Error! Bookmark not defined. Figure 18: HNWI Product Offerings According to Religious Orientation ........................................................ Error! Bookmark not defined. Figure 19: Regional Dynamics by Key Countries .......................................................................................... Error! Bookmark not defined. Figure 20: Asset Allocation in Leading Markets, 2012 ................................................................................... Error! Bookmark not defined. Figure 21: Asset Allocations to Alternate Investments, 2012 ......................................................................... Error! Bookmark not defined. Figure 22: Key Trends in the Asia-Pacific Region ...................................................................................................................................... 12 Figure 23: Drivers of Wealth Management Industry in Key Markets of the Asia-Pacific Region ..................... Error! Bookmark not defined. Figure 24: Growth of HNWIs in the Asia-Pacific Region by Volume (Million), 2008–2017 ............................. Error! Bookmark not defined. Figure 25: Growth of HNWI Wealth in Asia-Pacific Region by Value (Trillion), 2008–2017 ............................ Error! Bookmark not defined. Figure 26: Asian HNWI Population by Key Countries (Thousand), 2008–2012 ............................................. Error! Bookmark not defined. Figure 27: Investable Wealth in Key Countries and Drivers........................................................................... Error! Bookmark not defined. Figure 28: Growth Prospects of Investable Wealth in Key Countries and Drivers (%), 2008–2017 ................ Error! Bookmark not defined. Figure 29: Branding and Marketing Strategies ........................................................................................................................................... 13 Figure 30: Key Branding Strategies in the Asia-Pacific Region ..................................................................... Error! Bookmark not defined. Figure 31: Gap in Wealth Management Product Offerings ............................................................................ Error! Bookmark not defined. Figure 32: Branding, Marketing and Targeting Strategies of DBS Bank ..................................................................................................... 15 Figure 33: Branding, Marketing and Targeting Strategy of HSBC Bank ........................................................ Error! Bookmark not defined. Figure 34: Branding, Marketing, Product and Targeting Strategy of ICICI Bank .......................................... Error! Bookmark not defined. Figure 35: Snapshot of Americas HNWI Wealth and Population, 2012 ...................................................................................................... 17 Figure 36: Market Segmentation Adopted by Wealth Market Players in the Americas ................................... Error! Bookmark not defined. Figure 37: Volume of HNWIs in Americas, 2012 ........................................................................................... Error! Bookmark not defined. Figure 38: Wealth Distribution by Industry in Brazil and the US, 2012 ........................................................... Error! Bookmark not defined. Figure 39: Regional Dynamics by Key Countries .......................................................................................... Error! Bookmark not defined. Figure 40: Asset Allocation in Leading Markets, 2012 ................................................................................... Error! Bookmark not defined. Figure 41: Key Trends in the Americas Region .......................................................................................................................................... 18 Figure 42: Asset Allocation in Leading Markets, 2012 ................................................................................... Error! Bookmark not defined. Figure 43: Growth of HNWIs in Americas Region by Volume (Million), 2008–2017 ....................................... Error! Bookmark not defined. Figure 44: Growth of HNWI Wealth in Americas Region by Value (Trillion), 2008–2017 ............................... Error! Bookmark not defined. Figure 45: Americas HNWI Population by Key Countries (Thousand), 2008–2012 ....................................... Error! Bookmark not defined. Figure 46: Investable Wealth in Key Countries and Drivers (US$ Billion), 2008, 2012, 2015 and 2017 ......... Error! Bookmark not defined. Figure 47: Growth Prospects of Investable Wealth in Key Countries (%), 2008–2017 ................................... Error! Bookmark not defined. Figure 48: Branding and Marketing Strategies in the Americas .................................................................................................................. 19 Figure 49: Merrill Lynch Mobile Application for Wealth Management ............................................................ Error! Bookmark not defined. Figure 50: Scale-driven Consolidation in Bank Brokerage and Emergence of Integrated Institutions ............ Error! Bookmark not defined. Figure 51: JP Morgan Chase‟s Facebook Marketing Initiative ....................................................................... Error! Bookmark not defined. Figure 52: Screenshot of Visa Business Network Facebook Login Page ...................................................... Error! Bookmark not defined. Figure 53: Coverage Models Dominate the Ultra HNW Market ..................................................................... Error! Bookmark not defined. Figure 54: Wealth by Design for Women Portal of HoyleCohen .................................................................... Error! Bookmark not defined. Figure 55: Screenshot of TD Canada Trust‟s $PLIT IT Facebook Application ............................................................................................ 20 Figure 56: US Trust „What is Worth?‟ Campaign ........................................................................................... Error! Bookmark not defined. Figure 57: UBS Bank „We Will Not Rest‟ Campaign ...................................................................................... Error! Bookmark not defined. Figure 58: Asset Allocation in Leading Markets, 2012 ................................................................................................................................ 22 Figure 59: Market Segmentation Adopted by Wealth Market Players in Europe ............................................ Error! Bookmark not defined. Figure 60: Wealth Distribution in European Countries Relative to the World (%), 2012 ................................. Error! Bookmark not defined. Figure 61: UHNWIs – Regional Distribution in France and the UK (%), 2011 ................................................ Error! Bookmark not defined. Figure 62: Regional Dynamics by Key Countries .......................................................................................... Error! Bookmark not defined.

LIST OF FIGURES



Figure 63: Asset Allocation in Leading Markets, 2012 ................................................................................... Error! Bookmark not defined. Figure 64: Share of Sustainable Investments in Total HNWI Portfolio, 2007, 2009 and 2011 ........................ Error! Bookmark not defined. Figure 65: Key Trends in the European Region ......................................................................................................................................... 23 Figure 66: Growth of HNWIs in Europe by Volume (Million), 2008–2017 ...................................................... Error! Bookmark not defined. Figure 67: Growth of HNWIs Wealth in Europe by Value (US$ Trillion), 2008–2017 ..................................... Error! Bookmark not defined. Figure 68: European HNWI Population by Key Countries (Thousand), 2008–2012 ....................................... Error! Bookmark not defined. Figure 69: Investable Wealth in Key Countries and Drivers (US$ Billion), 2008, 2012, 2015 and 2017 ......... Error! Bookmark not defined. Figure 70: Growth Prospects of Investable Wealth in Key Countries (%), 2008–2017 ................................... Error! Bookmark not defined. Figure 71: Branding and Marketing Strategies in Europe ........................................................................................................................... 24 Figure 72: Branding and Marketing Strategies .............................................................................................. Error! Bookmark not defined. Figure 73: Rebranding Strategies Adopted by Wealth Management Organizations in Europe ...................... Error! Bookmark not defined. Figure 74: Product Strategies ....................................................................................................................... Error! Bookmark not defined.

LIST OF TABLES



LIST OF TABLES

Table 1: Growth of HNWIs in the Asia-Pacific Region by Volume (Million), 2008–2017 ................................. Error! Bookmark not defined. Table 2: Growth of HNWI Wealth in Asia-Pacific Region by Value (Trillion), 2008–2017 ............................... Error! Bookmark not defined. Table 3: HNWI Population in Asian Wealth Market (Thousand), 2008–2012 ................................................. Error! Bookmark not defined. Table 4: Percentage of HNWIs who are Considering Investing in Alternative Asset Class ............................ Error! Bookmark not defined. Table 5: Growth of HNWIs in Americas Region by Volume (Million), 2008–2017 .......................................... Error! Bookmark not defined. Table 6: Growth of HNWI Wealth in Americas Region by Value (Trillion), 2008–2017 ................................... Error! Bookmark not defined. Table 7: HNWI Population in the Americas Wealth Market (Thousand), 2008–2012 ..................................... Error! Bookmark not defined. Table 8: Growth of HNWIs in Europe by Volume (Million), 2008–2017 .......................................................... Error! Bookmark not defined. Table 9: Growth of HNWIs Wealth in Europe by Value (US$ Trillion), 2008–2017 ........................................ Error! Bookmark not defined. Table 10: HNWI Population in the European Wealth Market (Thousand), 2008-2012 ................................... Error! Bookmark not defined. Table 11: HNWI Wealth Band and Group Definitions ................................................................................................................................. 27

EXECUTIVE SUMMARY



1 Executive Summary

Managing the wealth of individual clients has become a strategic priority for financial institutions across the

developed and developing markets. Global wealth management growth in terms of AuM fell dramatically over

the last three years (2009–2012) due to the US economic crisis, combined with the eurozone crisis in 2011,

resulting in high market volatility and sapped economic growth globally that eroded investors‟ asset values

and refrained them from investing in the capital market. However, wealth management organizations are

adopting various strategies in order to build a distinctive brand, helping to distinguish their product offerings

from their counterparts in order to gain a competitive edge. Moreover, the wealth management organization

segments customers under various categories according to the wealth holdings. Many private banks and

wealth managers across the Asia-Pacific, Americas and Europe have developed sector specific strategies to

tap into groups of high net-worth individuals and families through their personal interests, leading to different

approaches to segmentation and the factors that need to be taken into account when assessing the needs of

different groups.

Wealth management industry registered significant growth in HNWIs

There was a significant increase in the number of HNWIs globally, enabling wealth management

organizations to overhaul their business models and target strategies in order to cater to the growing needs of

the wealthy individuals. In 2012, the total number of HNWIs recorded a nominal growth of X.X%, increasing

from XX.X million people in 2011 to XX.X million people in 2012. The global investable wealth of HNWIs

increased by X.X% to reach US$XX.X trillion in 2012. The Asia-Pacific region accounted for X.X million

HNWIs, compared to X.X million in the Americas and X.X million in Europe in 2012. In terms of assets, North

America accounted for the HNWIs‟ investable wealth of US$XX.X trillion in 2012, an increase of X.X%

compared to 2011; Asia Pacific accounted for US$XX.X trillion, an increase of X.X% compared to 2011 and

Europe accounted for US$XX.X trillion, an increase of X.X%.

Market segmentation and scope of wealth management business

Wealth management companies are segmenting their clients through an asset-based approach or through

linear segmentation. In order to deliver cost-effective service offerings to various levels of wealth management

customers and in order to do so, asset management companies needs to have a well-defined and executable

segmentation plan. Wealth management firms categorize their clients into four segments: the mass market,

mass affluent, high net worth individuals (HNWIs) and ultra high net worth individuals (UHNWIs). The mass

market segment comprises individual households with a moderate income and property which need only basic

banking and investment services. The mass affluent segment includes households with an above average

income and assets which require comprehensive wealth management services. HNWIs are the households

with substantial assets that have intricate wealth management requirements and UHNWIs are extremely

wealthy families which may require private banking and family office services to satisfy their wealth

management needs. Private banks and wealth managers have developed sector specific strategies to tap into

groups of high net worth individuals and families through their personal interests.

Branding strategies adopted by domestic and foreign players target a greater client base

The brand value of wealth management firms have an important say on their market and scope of business.

Branding is important not only to demarcate the firm from its competitors, but also to build their reputation and

credibility among customers. Wealth management firms in general tend to build their brand centering on the

following aspects: highlighting the expertise they have in offering specialized services and consultation,

highlighting their experience as an established brand, and highlighting the number of clients or net worth of

business. Moreover, various branding strategies adopted by wealth management organizations are performed

by focusing on domestic brand awareness and developing private banking within the brand. Wealth

management organizations also target foreign traditional providers by highlighting the experience and goodwill

of the company as an established banking player across the borders.

EXECUTIVE SUMMARY



Increasing interest in investments of passion (IOP) among Asia-Pacific HNWIs

There has been a significant growth in demand for alternative investments among HNWIs in the Asia-Pacific

region. In 2011, certain categories of IOPs such as art, jewelry and collectibles delivered higher returns than

equities since the global financial and economic crisis, and emerged as an important component of the overall

investment strategy for Asia-Pacific HNWIs. China and Hong Kong overtook the US as the world‟s largest

market for art and antiques and the interest is pushing up the value of indigenous works, as evidenced by the

XX.X% increase in 2011 in the World Traditional Chinese Works of Art Index. Significantly, Asia-Pacific

HNWIs continue to buy into professional sports, despite the lack of financial returns. For example, in August

2011, Malaysian businessman and Air-Asia owner Tony Fernandes teamed up with India‟s Mittal family to

acquire the newly promoted Queens Park Rangers football club in the UK.

Improving brand presence by expanding access channels such as technology enabled video services

and mobile applications for HNWIs, clients and advisors

The on the go lifestyle of the wealthy population has given birth to the requirement of accessing account

information anywhere and anytime, while changing dynamics of technological factors such as increasing high

speed internet penetration and smartphone adoption has made it possible. Multi-channel access, coupled with

integrated information, enables clients to access constantly updated and accurate information, whether in

person, over the telephone or online in order to increase client touch points. In 2011, Merrill Lynch launched

mobile applications for Apple and BlackBerry phones for customers of Merrill Lynch Wealth Management and

its online discount brokerage service known as Merrill Edge. This App enables customers to go through their

portfolio status and account movements. It also allows clients to transfer money between connected Merrill

Lynch brokerage and Bank of America banking accounts and trade in capital markets. The main driving factor

behind this type of launch is to create a unique brand identity among existing users, as well as new

customers, which indicates how advanced the company/financial institutions can go to satisfy the emerging

customer needs.

Similarly, European wealth managers have developed the use of smartphone and tablet applications in

France, Germany, Italy, Spain, Switzerland, and the UK. BNP Paribas Fortis is targeting wealthy investors in

Belgium by offering James, a video-based access point for financial advisors. The service consists of a

client‟s investment profile and objectives, and provides real-time information enabling advisors to contact the

client directly. Clients with investable assets of EURXX,XXX can avail the service free of charge in Belgium.

GLOBAL SNAPSHOT



2 Global Snapshot

The wealth management industry emerged as a significant segment for the financial sector in the late 1980s.

Due to increasing demand from wealthy individuals throughout the world, the industry was equipped with a

network of investment advisors to serve the high net worth individuals (HNWIs) and ultra high net worth

individuals (UHNWIs). Global wealth management growth has fallen dramatically over the past three years

(2009–2012) due to the US economic crisis, combined with the eurozone crisis in 2011, resulting in high

market volatility and sapped economic growth globally, which eroded investors‟ asset value and refrained

them from investing in capital markets.

Regulators in Europe and North America have started to recover lost tax revenues from offshore centers to

strengthen their fiscal activities that have been on backburner due to austerity measures. Although, emerging

markets will reduce the gap, the highest concentration of wealth will continue to remain in the US and Europe.

Among emerging markets, China is expected to remain the leading force in the increase of the millionaire

assets, followed by Brazil and Russia. Moreover, China and South Korea are likely to join the club of top 10

countries as measured by the total number of millionaires by the year 2020.

Figure 1: Global Snapshot of HNWI Wealth and Population, 2012

Source: Timetric analysis © Timetric

GLOBAL SNAPSHOT



2.1 Branding and Marketing Strategies

The brand value of wealth management firms have an important say on their market and scope of business.

Branding is important not only to demarcate the firm from its competitors, but also to build their reputation and

credibility among customers. With the increase in foreign interest and tightening of competition in the wealth

management market, competitors devote a significant amount of resources to highlight their brands and

services and distinguish themselves from other providers. Wealth management firms tend to build their brand

centering on the following aspects: highlighting the expertise they have in offering specialized services and

consultation, highlighting their experience as an established brand, highlighting the number of clients, and net

worth of business. The domestic providers in wealth management and foreign traditional providers can pursue

the following important strategies for developing their brand identity within the respective target markers.

Figure 2: Branding Strategies Adopted by Domestic and Foreign Players


ASIA PACIFIC



3 Asia Pacific

The unprecedented economic growth, vibrancy and spread of wealth accumulators in the Asia-Pacific region

have drawn in both domestic and foreign wealth managers to the wealth management market in this region.

Underlying its vibrancy is a diverse customer segment with varied demands in terms of investment options

and services. Wealth management firms in the region are therefore beset with the challenge of not only

offering diverse products and services, but also meeting the varied demands of highly diverse customer

groups that are extremely sensitive to competitive product offering and brands. Financial institutions are

offering premium services and sophisticated product offerings in order to face the fierce market competition

and to enhance revenues.

Leading global wealth managers have succeeded in tapping into the market to a significant extent,

successfully meeting the demands of the HNWI Asian clients. Asian markets contributed nearly XX% of

Citigroup Private Bank and Citigroup Wealth Advisors‟ net income in 2005 and, in the first half of 2006, BNP

Paribas‟ private banking unit in Hong Kong experienced a XX% revenue increase.

This section discusses the regional dynamics in the wealth management market of Asia-Pacific. It also

examines consumer attitudes and behavior such as asset allocation and looks into the key branding and

marketing strategies pursued by key players.

Figure 3: Snapshot of Asian HNWI Wealth and Population, 2012


ASIA PACIFIC



3.1.1 Key trends and drivers

The vibrant wealth management markets of the Asia-Pacific showcase unique trends and are fostered by a

number of drivers. Emerging markets such as China, India and South Korea see growing demand for diverse

financial products and services and the HNWI population shows a greater interest towards investing in

investments of passion. Another popular trend noticeable in these markets is the demand for offshore wealth

management products and services. The key trends in the Asia-Pacific region are summarized below:

Figure 4: Key Trends in the Asia-Pacific Region


ASIA PACIFIC




In order to explore the growing number of wealthy individuals in the Asia-Pacific market, firms need to focus

on the key success components of wealth management such as branding, targeting, product differentiation

and customer retention.

Figure 5: Branding and Marketing Strategies


ASIA PACIFIC



3.3 Branding and Segmentation Case Studies

The following section discusses the branding and segmentation strategies adopted by leading wealth

management companies in the Asia-Pacific region

3.3.1 DBS Bank redefines its marketing and branding strategy to expand presence across Asia

In December 2010, DBS Bank announced plans to introduce a regional brand promotion spread across its six

major markets as part of efforts to increase its income participation from outside Singapore. The bank said

this move underscored its commitment to building a leading Asian bank with a strong presence in the region‟s

three key regions of growth – South East Asia, South Asia and Greater China.

Targeting strategy

The bank enhanced its presence in the region through numerous initiatives. DBS Hong Kong was one of the

first banks to offer cross-border RMB (renminbi, the official currency of China) trade settlement services and

retail banking products in Hong Kong. It has also opened two new centers to serve its medium to small cap

corporate clients in addition to its five existing enterprise banking centers.

DBS China will speed up its expansion in the mainland by increasing its current branch network from 16

branches and sub-branches to 50 branches in the next three years. To offer a higher level of service to its

corporate and enterprise banking customers, DBS has also installed a number of country desks to provide

easier access for its customers in the region. In order to further exploit the development prospects in Greater

China, the bank moved its DBS Taiwan headquarters to Taipei‟s Xin Yi financial district and has aspirations to

launch a locally incorporated subsidiary.

DBS Indonesia launched an SME financing program in late 2010 and was expecting to double its loan volume

to SME customers over the period of next one year. In India, DBS has 12 branches, the largest branch

network for any Singaporean bank. It intends to expand its presence further by developing its wealth

management and SME business schemes.

The DBS Private Client service in Hong Kong and Singapore targets HNWI individuals with investable assets

of over SGDX.X million. In order to reach out to enterprise and wealthy customer class who travel on a regular

basis around the region, DBS runs on the board entertainment systems of key Asian airlines such as Cathay

Pacific, Singapore Airlines, China Airlines, Jet Airways, Garuda, and Eva Air. DBS also offer complimentary

limousine services and a personal assistance and emergency cash withdrawal facility to frequent HNWI

travelers.

Marketing strategy

As a part of their wealth management marketing, DBS Taiwan launched various promotional offers targeting

HNWI clients. One such offer is to provide a special interest rate of X.XX% for those who bring funds between

NT$X million and NT$X million between February 2013 and April 2012. Wealth management clients who bring

in over NT$X million are offered a special interest rate of X.XX%. The offer targeted wealth management

clients who received red envelopes and year-end bonuses after the Lunar New Year Break. Another offer

extended by DBS is to provide concessional exchange rates to wealth management clients who make foreign

transactions. Customers making transactions in Australian dollars or euros are offered X cents (plus or minus)

concession from the bank‟s official exchange rate. Those undertaking transactions in dollars are offered a X.X

cents (plus or minus) concession. Besides this, DBS also offers a XX% discount on the processing fee to

those clients who purchase mutual funds between February 2013 and December 2013. As a part of its

expansion strategy in Singapore, DBS launched DBS Treasures Private Client in Singapore and Hong Kong.

ASIA PACIFIC



Branding strategy

In order to promote its brand position in the wealth management business, DBS launched a three month

campaign that endorsed its expertise in corporate lending, investment banking and capital market. It also

fortified its bench strength by making key hires such as:

Olivier Crespin, formerly CitiBank‟s Private Banking Global Head of Operations,

Lim Say Boon, formerly Chief Investment Strategist of Standard Chartered Bank

Lawrence Lua, formerly Head of Senior Client Banker Team in at Julius Baer

Robert Kung, Head of Market Management for China Region a Credit Suisse Bryan Goh, formerly founding partner of First Avenue Partners

Terry Alan Farris, formerly client wealth advisor at UBS AG

The campaign cuts across multiple platforms including TV, print, cinema, radio, online and outdoor in

Singapore, Hong Kong, China, India, Indonesia and Taiwan. On top of traditional media, DBS also showcased

the bank‟s industry experts on Facebook and targeted tech-savvy customers through smartphones.

Figure 6: Branding, Marketing and Targeting Strategies of DBS Bank


EUROPE



4 The Americas

The wealth management markets in the Northern and Latin American countries presented a contradictory

picture during the review period. The US market was severely hit by the economic downturn, while the impact

of the downturn was relatively less in the Latin American countries. Until recently, the Latin American wealth

management markets were relatively untapped as wealth management bankers were unwilling to touch some

of Latin America's more impoverished and politically volatile markets, fearing that chasing wealthy clients in

them would bring more losses than profits. However, as a result of an improved political framework,

impressive GDP growth and an increasing number of wealthy families interested in growing their fortune, that

view has now changed with many global wealth management houses now interested in expanding in these

markets. Amid this backdrop, it is no surprise that banks are more willing to enter some of the region's riskiest

and smallest markets such as Ecuador, Bolivia and parts of Central America. One such bank is BNP Paribas,

which has been exploring business opportunities in all of those countries, as well as in Guatemala and others.

Those with net assets of US$X million or more in the US, excluding primary residences, dropped by X.X%

between 2007 and 2011, as the country‟s economy suffered its most significant downturn since the Great

Depression. However, the wealth management market in the country has improved considerably since the

economic downturn. Growth in stock markets and signs of recovery in real estate propelled the number of

millionaires in the country above pre-recession levels, increasing from X.X million in 2007 to X.X million in

2012, an increase of XX.X%. Growth in the country‟s wealthy population is expected to continue in the years

ahead. These HNWIs held US$XX.X trillion in wealth, over a third of the total individual wealth held in the

country. This is above the global average of XX%, indicating a relatively uneven spread of wealth. Real GDP

fell by X.X% between the third quarter of 2007 and the second quarter of 2009, and total HNWI wealth fell by

XX% in 2008.

EUROPE



Figure 7: Snapshot of Americas HNWI Wealth and Population, 2012

Source: Timetric analysis

EUROPE




The following section contains key trends and drivers in the region.

Figure 8: Key Trends in the Americas Region


EUROPE




Building a distinctive brand is becoming critical for new client acquisition and begins with the specification of

the priority target markets, not just in terms of wealth levels and tangible needs, but increasingly in terms of

their attitudes to relationships and style of service.

Without defining the target market, companies cannot effectively prioritize their product development,

relationship managers and the right tone for communications. Most wealth managers have gone through the

motions of segmentation but too many are yet to address the hard choices that will provide the platform for a

distinctive brand proposition, supported by a distinctive service, giving a message that is clear to introducers

as well as clients.

The following figure provides the branding, product, targeting and customer retention strategies adopted by

various companies in the Americas.

Figure 9: Branding and Marketing Strategies in the Americas


EUROPE




4.3.1 TD Canada Trust branding strategy via social media

In August 2007, TD Canada Trust launched a Facebook group called TD Money Lounge in order to better

engage students and younger customers. The bank realized that its general media approach primarily

targeted the population aged 25 and older, and that it had to take a different approach.

“Banks aren‟t traditionally cool and we wanted to partner with somebody or be aligned with somebody who is

cool. And Facebook is sort of it right now,” said Susan McVey, vice-president of customer segments and

strategy. “We really did this so we could understand more about the student population and get into a two-way

dialogue with them. The TD Money Lounge gives us an opportunity to connect with students in their own

space to better understand what they need and want from their bank.”

The site aims to help young people with financial management when they first move away from home.

Member discussion forums, moderated by a team of TD employees, provide basic tips on popular topics such

as splitting bills with roommates, living on CAD$X a day, and budgeting for groceries.

The page also provides links to student-targeted content such as career tips, as well as featuring TD‟s own

Facebook application $plit IT, which helps roommates divide up and keep tabs on shared expenses.

Figure 10: Screenshot of TD Canada Trust’s $PLIT IT Facebook Application


EUROPE



Marketing

In marketing the site, TD Canada Trust realized that free offers are an effective way of attracting more student

interest. The bank therefore launched an initiative by offering discounts from selected retailers in order to

encourage Facebook users to join the group, with the first phase featuring CAD$XX coupons for Roots,

Zellers, Best Buy stores and Empire Theatres cinemas, as well as buy-one-get-one-free Dominos coupons.

The bank also tied the site to its environmental initiatives by donating CAD$X to its Friends of the

Environment Foundation for every Facebook user who refers a friend to the group.

TD Money Lounge was promoted through events on university campuses, as well as at a fair for high school

graduates which was attended by XX,XXX graduates and their parents. The most successful event was a

Money Lounge bus that picked up students on campuses and drove them to stores to pick up school supplies

and redeem their coupons. Wireless internet on the bus then enabled students to sign up for Money Lounge.

These offline activities helped to drive activity on the site, while the bank also used limited banner ads on

Facebook and enjoyed extensive media coverage.

The bank viewed the six-month pilot project as a learning experience that would help it to define a model for

interacting with consumers in the social media space. “We saw this field of social media and viral marketing

emerging and we wanted to get an idea of what it is and how to work with it, as it will definitely be part of the

future marketing mix”, McVey said. “We didn‟t attach an ROI to it. Whether we got XXX or XX,XXX members,

the value would be in the learning.”

Outcome

The most valuable learning curve came from observing the dialogues with and between members in

discussion forums, with McVey describing Money Lounge as a 24/7 live focus group. In addition to receiving

feedback on the bank‟s offerings and how they might be improved, the bank also learned the ins and outs of

managing an online community, what guidelines to set, how much they should be monitoring posts, how and

when to go in and out of the discussion and how much freedom to give employees. “You have to figure out

what‟s right for you”, McVey says, “There‟s not one right answer.”

The bank also learned that social media marketing requires considerably more time and resources than

traditional marketing. Once a traditional marketing campaign has been created and broadcast, little more

needs to be done. Engaging customers through social media, however, is an ongoing process. “It‟s not a

spectator sport”, McVey says.

EUROPE



5 Europe

Following the financial crisis in 2009, Europe is undergoing a period of social unrest, political instability and

speculative investment flows. Slow recovery of demand from emerging markets contributed to the situation,

driven by domestic factors, and resulted in a decline in the number of UNWIs in the region. Growth was

adversely affected by the eurozone crisis and the implications of stricter tax regimes implemented by

financially distressed governments. However, developments in bordering countries had a positive effect on

growth in the region and drove wealth flows from the periphery towards core economies such as Germany

and the UK. This section discusses the regional dynamics in the wealth management market of Europe. It

also looks into consumer attitudes and behavior such as asset allocation and analyses the key branding and

marketing strategies pursued by key players.

Figure 11: Asset Allocation in Leading Markets, 2012


EUROPE




Wealth management organizations and banks offer services according to the current trends followed by

HNWIs in Europe.

Some of the leading drivers encouraging growth in the industry are philanthropy advisory services and

increased use of alternative products such as art collectibles and Islamic wealth management products. The

development of technology, such as the use of multi-access channels for advisors to conduct meetings with

clients, also led to improved services and a clearer understanding of the services offered to European HNWI

clients. The increasing trend in real estate, equities and fixed income offerings also drove the overall demand

of wealth management products and services offered in Europe. The key trends in the region are summarized

below:

Figure 12: Key Trends in the European Region


EUROPE



5.2 Branding and Marketing Strategy

Branding and marketing plays an increasingly important role in determining the success of private wealth

advisory firms. Branding and marketing strategies define the overall goal of the wealth management

organizations by differentiating their products and services from the peer group or competitors. Branding

strategies are employed to deliver the company‟s message to clients, increase credibility, connect the target

prospects in order to build a stronger relationship with the organization, and to ensure user loyalty. The figure

below defines the branding and marketing strategies adopted by various wealth management organizations

and banks in order to measure the effectiveness of the products and services offered and to remain in

competition with enhanced service offerings.

Figure 13: Branding and Marketing Strategies in Europe


EUROPE




The following section discusses the branding and segmentation strategies adopted by leading wealth

management companies in the European region.

5.3.1 Deutsche Bank

Product strategy

In October 2010, Deutsche Bank (DB) announced the launch of a new social media promotion with the goal of

bolstering customer participation through an innovative new communication network. Deutsche Bank‟s Global

Transaction Banking launched a social media tool which allows customers to “Drive DB!” by directly affecting

and assisting to the services developed by DB for them.

The tool brings together existing and potential investors along with Deutsche Bank executives, in a secure

online mode. The theme “Drive DB!” lets clients engage in driving product development through online

selections, discussions and information sharing with other customers and with the associates of the bank.

Marketing Strategy

The bank describes this campaign as part of an ongoing process to increase customer‟s engagement across

its global transaction banking division that has been in progress for some time. These initiatives comprise of

actions to optimize and organize the customer acceptance and documentation process, modifications in the e-

banking applications and simplification of product lists.

Daniel Marovitz, head of product management for Global Transaction Banking at Deutsche Bank said,

“Deutsche Bank is raising the bar for customer experience. Social media has transformed how we

communicate with each other but in the business world its power remains relatively untapped. We are

embracing this opportunity for change by launching a campaign that takes client engagement to a new level

with the latest technology available.”

Branding Strategy

In April 2011, Deutsche Bank unlatched what it epitomized as a „globally unique brand forum‟ in its revamped

towers in Frankfurt, called Brand-Space. Dr Josef Ackermann, chairman of the management board at

Deutsche Bank, said at the opening ceremony: “The new Deutsche Bank towers stand for the principle of

openness and innovation. From this perspective, they are a trademark in themselves and BrandSpace

represents an essential element of this.”

Deutsche Bank disassociated its logo from its name in 2010 and put forward its brand claim as „Passion to

Perform‟ in a handwritten typeset, and apportioned it with a suitable role as the key brand promise, Brand-

Space also points towards the further development of the bank‟s brand infrastructure.

Stefan Baron, global head of communications and corporate social responsibility added: “The brand and

brand promise became an experience for the senses. Our aim is to bring the brand closer to our clients and

foster trust.”

Christofer Habig, global head of brand communications and corporate citizenship at Deutsche Bank, said:

“We succeeded in transforming our global brand concept directly into a tangible object and have thus

completed a further stage of our brand strategy. Our logo is not only physically present in the world of our

clients, but it has become an actual object that one can experience directly. This creates new insights into

Deutsche Bank‟s „Passion to Perform‟.”

APPENDIX



6 Appendix

6.1 Methodology

All Timetric foresight reports are created by following a comprehensive, four-stage methodology. This includes

market study, research, analysis and quality control.

1) Market Study

A. Standardization

Definitions are specified using recognized industry classifications. The same definition is used

for every country.

Annual average currency exchange rates are used for the latest completed year. These are

then applied across both the Review and forecast data to remove exchange rate fluctuations.

B. Internal audit

Review of in-house databases to gather existing data:

Historic market databases and reports

Company database

C. Trend monitoring

Review of the latest companies and industry trends

2) Research

A. Sources

Collection of the latest market-specific data from a wide variety of industry sources:

Government statistics

Industry associations

Company filings

International organizations

Regulatory agencies

B. Expert opinion

Collation of opinion taken from leading industry experts

Analysis of third-party opinion and forecasts:

Broker reports

Media

Official government sources

C. Data consolidation and verification

Consolidation of data and opinion to create Review datasets

Creation of models to benchmark data across sectors and regions

3) Analysis

A. Market forecasts

Feeding forecast data into market models:

Macroeconomic indicators

Industry-specific drivers

Analysis of industry database to identify trends:

Latest trends

Key drivers of the industry

B. Report writing

Analysis of market data

Discussion of company and industry trends and issues

Review of financial deals and trends

4) Quality Control

APPENDIX



A. Templates

Detailed process manuals

Standardized report templates and accompanying style guides

Complex forecasting tool used to ensure forecast methodologies are consistently applied

Quality-control checklists

B. Quality control process

Peer review

Senior-level QC

Random spot checks on data integrity

Benchmark checks across databases

Market data cross-checked for consistency with accumulated data from:

Company filings

Government sources.

6.2 Definition

Table 1: HNWI Wealth Band and Group Definitions

Wealth Band Definition

Billionaires Billionaires are those HNWIs with wealth of US$1 billion or more, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

Centimillionaires Centimillionaires are those HNWIs with wealth of between US$100 million and less than US$1 billion, including equities, bonds, cash and deposits, fixed-income products real estate (excluding primary residence), alternative assets and business interests.

Affluent Millionaires

Affluent millionaires are those HNWIs with wealth of between US$30 million and less than US$100 million, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

Mid-Tier Millionaires

Mid-tier millionaires are those HNWIs with wealth of between US$5 million and less than US$30 million, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

Lower-Tier Millionaires

Lower-tier millionaires are those HNWIs with wealth of between US$1 million and less than US$5 million, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

Wealth Group Definition

HNWIs The high net worth individuals (HNWIs) wealth group comprises all wealth bands. It represents those individuals with wealth of US$1 million or more, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

UHNWIs

The ultra high net worth individuals (UHNWIs) wealth group comprises the billionaire, centimillionaire and affluent millionaire wealth bands. It represents those individuals with wealth of US$30 million or more, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

Core HNWIs

The core HNWIs group comprises the mid-tier millionaire and lower-tier millionaire wealth bands. It represents those individuals with wealth of between US$1 million and less than US$30 million, including equities, bonds, cash and deposits, fixed-income products, real estate (excluding primary residence), alternative assets and business interests.

Source: WealthInsight and Timetric analysis ©Timetric

APPENDIX



6.3 Background

Timetric‟s dedicated research and analysis teams consist of experienced professionals with an industry

background in marketing, market research, consulting and advanced statistical expertise.

Timetric adheres to the Codes of Practice of the Market Research Society (www.mrs.org.uk) and the Society

of Competitive Intelligence Professionals (www.scip.org).

All Timetric databases are continuously updated and revised.

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[email protected].

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APPENDIX



3. To provide authoritative independent economic insights:

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