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Deutsche Asset& Wealth Management
Deutsche Asset & Wealth Management
Next Generation – In the context of international Wealth ManagementTradition meets Modernity
David Kroell, International Family Office ServicesTel Aviv 10th June, 2014
Deutsche Asset& Wealth Management
Deutsche Asset & Wealth ManagementDeutsche Bank’s History of Family Office Services
2
1988
Foundationof Wilhelm von
Finck AG in Munich by
Wilhelm von Finck sen. and Wilhelm
von Finck jun.
1999
Foundation of Deutsche Family Office GmbH in
Frankfurt am Main by Deutsche Bank
1990
Foundation of Oppenheim Vermögens-
treuhand GmbHin Cologne by
former partners of Sal. Oppenheim
2005
Acquisition of Wilhelm von Finck AG by Deutsche
Bank
2011
Creation of Wilhelm von Finck Deutsche Family Office AG by merger of Wilhelm von Finck AG and Deutsche Family
Office GmbH
2013
Creation of Deutsche
OppenheimFamily Office AG
by merger of Wilhelm von Finck Deutsche Family
Office AG and Oppenheim
Vermögenstreuhand GmbH
Going international: creation of
International Family Office
Services (IFOS)
Non-Core Operations
5 Strategic Pillars
Private & Business Clients
Deutsche Asset &Wealth
Management
Global Transaction
Banking
Corporate Banking & Securities
Deutsche Bank
2Deutsche Asset& Wealth Management
Deutsche Asset& Wealth Management
International Family Office ServicesA Full Range of Solutions – Next Generation
Note: The services described are provided by Deutsche Bank AG or by its subsidiaries and/or affiliates in accordance with appropriate local legislation and regulation.Certain products and services may not be available in all locations or to all Deutsche Bank Wealth Management clients.
Discretionary Portfolio Mgmt
Asset Allocation/Risk Mgmt.
Wealth Advis-ory Mandate
Alternative In-vestments
Structured Products
FX & Commodit-ies
Mutual Funds
Fixed Income
Key Clients Ser-vices
NextGeneration
EstatePlanning
Fiduciary Solu-tions
Wealth Planning
Advisory
Loans and Credit Solutions
Equities
Deposits & Cash Mgmt
Client
Monitoring and review
Tailored investment strategy
Client’s personal situation
and objectives
3Deutsche Asset& Wealth Management
4Deutsche Asset& Wealth Management
Geldvermögen Immobilien Sachvermögen
0
200
400
600
800
1000
Erbschaft innerhalb einer Generation
Erbschaft zwischen Generationen
Prediction 2030What can be expected?
4
Existing customer relationships endangered
Accelerated loss of Assets
Inherited Assets from 2011 until 2020 (Germany)in bn. Euro
Forecast
- The volume of inheritances worldwide is constantly rising - a trend that will continue
- Substantial amounts of money in the coming years will be inherited to the next generation
- While the transfer of assets from the older generation to the Baby Boomers takes place, in the coming years a gigantic wave of private assets will be inherited to the younger generations (NextGen)
- These younger generations are referred to as Generation X and Y
- The estimates are € 2.6 trillion by 2020 for Germany and USD 30 trillion by 2040 for the USA
Wealth Managers can position themselves in an attractive market and benefit if they combine their traditional values with new customer requirements
Cp. Deutsches Institut für Altersvorsorge: Erben in Deutschland, Köln 2011
1 Cp. Accenture, The “Greater“ Wealth Transfer Capitalizing on the Intergenerational Shift in Wealth, 20122 Cp. Cocca, T.D., External Assets Managers, Studie Zürich, 2011, unveröffentlicht
Twofold Challenge:- Retain loyalty of existing customers- Continue development of an attractive
value proposition for NextGen
- New preference structure and behavioral patterns of customers
- Risk to not adequately address customers
- On average 70% of private banking customers are over 50 years.2
- In 40% of the cases, the next generation of the current customer is not known
Changing Customer Needs
Inheritance within a Generation
Inheritance over Generations
Bankable Assets Real Estate Tangible Assets
5Deutsche Asset& Wealth Management 5
Generation X (30 – 45 years) Generation Y (15 – 30 years)
Life Style
Financial Eductaion
Consumer behaviour
- As term for the future client-generation in private banking the so-called Generation X can be used
- In addition, Generation Y is included to account for possible additional scenarios
- Individualistic and independent
- “Work-Life-balance” is important
- Self-determination is important
- Conservative and prudent handling of money
- Better education than Baby-Boomers
- General financial knowledge
- Critical attitude towards banks
- Strongly affected by the 2007 financial crisis
- Low loyalty towards brands
- Pronounced affinity for new technologies
- Multi-bank relationships and frequent change of bank
- Independent and autonomous
- Self-representation is important
- Growing need to be accepted by comrades and network with them
- Willingness and eager to learn new things
- Merging the boundaries between education and entertainment
- Advice from friends and relatives has a higher value than an expert consultation1
- Producers, distributors and consumers of content
- Recommended products are preferred
- Higher reliance on information from neew media
- Insignificant customer retention force to bank brands
1 Vgl. Williams K.C./Page , R.A.; Marketing to the Generations, Journal of Behavioral Studies in Business, Volume 3, April 2011, S.9
Who exactly is the Next Generation (“NextGen”)?Characteristics
6Deutsche Asset& Wealth Management
1
2
3
4
5
6
52% of Twitter- and Facebook users are over 35 years old. The use in the age class 50-56 years has gone from 9% to 20% in the last 3 years
70% of the millionaires in the USA use Social Media
47% of the UHNW individuals in Europe use Facebook
On average a wealthy person in the USA is member of 2,8 Social Networks with an average of 110 contacts
Already today 20% of the age class 60 -69 years can not imagine their life without Social Networks
More than 50% of the UHNW individuals in Europe recognize Social Media as most important channel of communication with their bank.
Facts and Figures …..….. to the use of social media by NextGen customers
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“Banking is essential. Banks are not.”
Bill Gates
Change is nothing new to Wealth Management…..….. but it’s coming faster and with more fury
Deutsche Asset& Wealth Management
Requirements for Next Gen Wealth Management (1/2)10 Imperatives
Interact virtually!1
Give me power!2
Give me a sense!3
Network me!4
Emotionalise me!5
Deutsche Asset& Wealth Management
Requirements for Next Gen Wealth Management (2/2)10 Imperatives
Respect me!6
Inspire me!7
Open yourself up!8
Convince yourself!9
Re-invent yourself!10
10Deutsche Asset& Wealth Management
Po
ten
tial
fo
r ch
ang
e fo
r W
ealt
h M
ang
ers
Po
ten
tial
of
occ
ure
nce
of
the
rele
van
t S
cen
ario
Szenario 1
I-Bank
Szenario 2
Evolution of the established Banks
Szenario 3
Apple / Facebook-Bank (iWealth)
Szenario 4
It‘s all an Illusion
Cp. Cocca, T.D., Private Banking 2030, März 2014 , S. 16-18
Structure of the future Wealth-Management industryPossible scenarios for 2030
Deutsche Asset& Wealth Management
What is “DB Next Generation”?
— We anticipate the changed trends and needs of the upcoming entrepreneurial generation
— We provide inspiring ideas and agile strategies for long-term partnerships
— “Connecting and empowering the entrepreneurs of tomorrow in today’s world of finance”
As their global partner, we encourage and accompany the interdisciplinary and intercultural dialogue within this exclusive target group of tomorrow’s key clients and get in constant touch with them at an early stage of their lifecycle.
11Deutsche Asset& Wealth Management
Deutsche Asset& Wealth Management
International Family Office Next GenerationOur gateway for Next Generation clients
Next Generation SUCCESS I O N
I
O
N
nformation
rientation
etwork
Expertise
Education / Knowledge Transfer
Global Network
Under our initiative “Next Generation SUCCESSION”, Deutsche Asset & Wealth Management is offering a universe of dedicated educational programs bringing together:
founders, representatives and heirs of the most influential entrepreneurial families as well as young successful entrepreneurs from all over the world.
12Deutsche Asset& Wealth Management
13Deutsche Asset& Wealth Management
Important Information
13
Deutsche Asset & Wealth Management offers wealth management solutions for wealthy individuals, their families and select institutions worldwide. Deutsche Asset & Wealth Management, through Deutsche Bank AG, its affiliated companies and its officers and employees (collectively “Deutsche Bank”) are communicating this document in good faith and on the following basis.
This document is for information purposes only and is not intended to be an offer or solicitation, or the basis for any contract to purchase or sell any security, or other instrument, or for Deutsche Bank to enter into or arrange any type of transaction as a consequence of any information contained herein. It has been prepared without consideration of the investment needs, objectives or financial circumstances of any investor.
This document does not identify all the risks (direct and indirect) or other considerations which might be material to you when entering into a transaction. Before making an investment decision, investors need to consider, with or without the assistance of an investment adviser, whether the investments and strategies described or provided by Deutsche Bank, are appropriate, in light of their particular investment needs, objectives and financial circumstances. We assume no responsibility to advise the recipients of this document with regard to changes in our views. Deutsche Bank does not give taxation or legal advice. Investors should seek advice from their own taxation agents and lawyers, in considering investments and strategies suggested by Deutsche Bank. Where applicable, the terms of any investment will be exclusively subject to the detailed provisions, including risk considerations, contained in the Offering Documents. When making an investment decision, you should rely on the final documentation relating to the investment and not the summary contained in this document. Further information is available upon investor's request.
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No assurance can be given that any investment described herein would yield favorable investment results or that the investment objectives will be achieved. In general, the securities and financial instruments presented herein are not insured by the Federal Deposit Insurance Corporation ("FDIC"), and are not guaranteed by or obligations of Deutsche Bank AG or its affiliates. We or our affiliates or persons associated with us may act upon or use material in this report prior to publication. DB may engage in transactions in a manner inconsistent with the views discussed herein. Opinions expressed herein may differ from the opinions expressed by departments or other divisions or affiliates of Deutsche Bank.
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