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Competitive Dynamics in Brazilian Wealth Management
Published by
Datamonitor on Oct 19, 2012
PDF format - Delivered by Email within 1 day
OVERVIEW
- Catalyst
- Summary
- Methodology
EXECUTIVE SUMMARY
MARKET STRUCTURE
- The Brazilian domestic wealth market is served by a range of players but universal banks hold the majority of the market
- The majority of high net worth client assets are held in integrated private banks
- Wealth management firms dedicated solely to asset management are numerous
- Independent brokerage firms offering direct and online trading to the retail market are plentiful
- Minimum investment thresholds vary across the business models
- Brokerages target the mass affluent population with $250,000-500,000 in minimum investments
- Wealth management firms are not subject to a client minimum investment capacity classification but global standards apply
- Private banks target clients with over BRL3m ($1.5m) in investable assets
- Multi-family offices target those with $10m in investable assets
- The offshore market is led by universal banks but regional firms are entering the market
- Key factors shaping the competitive environment in Brazil
- The regulatory environment in Brazil favors no business model over another
- Different business models require different certification from Brazilian regulatory bodies
- The majority of Brazilian wealth managers derive income from assets under management and pay their relationship managers a bonus based on profitability
COMPETITIVE TRENDS
- Inward M&A activity has not been as buoyant as some expected
- Foreign firms have encountered strong competition from local firms and red tape has stalled activity
- Some foreign firms have retreated or remained offshore to serve Brazilian clients
- Organic growth in Brazil has also been muted as Sao Paulo and Rio de Janeiro remain the key centers for wealth management
KEY COMPETITORS
- The integrated private banks dominate the Brazilian wealth management market
- Key competitors in depth
- Bradesco Private Bank
- Lerosa Investimentos
- Santander Private Banking
- Verus Gestao de Patrimonio
APPENDIX
- Definitions
- Affluent
- Mass affluent
- High net worth (HNW)
- Liquid assets
- Further reading
- Selected bibliography
- Ask the analyst
- Disclaimer
TABLES
- Table: Market participants profiled in this report
- Table: Firms operating "private banking" units follow the universal or investment banking model
- Table: Wealth management activity is led by asset managers and family offices
- Table: Brokerage houses offer a mixture of execution-only and managed services
- Table: Different business models have different regulatory requirements
- Table: Foreign firms have favored local acquisitions over organic growth in Brazil
- Table: Key competitors by business model
- Table: Key facts: Bradesco Private Bank
- Table: Key facts: Lerosa Investimentos
- Table: Key facts: Santander Private Banking
- Table: Key facts: Verus Gestao de Patrimonio
FIGURES
- Figure: Specific business models lead different parts of the Brazilian market
- Figure: The number of private banking professionals with the CFP qualification is rising
- Figure: Remuneration in Brazil is high when compared to other high growth wealth markets
- Figure: Brazilian relationship managers earn a bonus based on profits
- Figure: The central-western and northern regions are a rising opportunity for local and foreign wealth managers
- Figure: Bradesco Private Bank sits within Bradesco's retail unit but benefits from other units as well
- Figure: Bradesco targets both the mass affluent and HNW markets
- Figure: Bradesco as a group is very active in social media but its private bank maintains a low profile
- Figure: Lerosa has diversified from a pure brokerage since its launch in 1967
- Figure: Santander Private Banking sits within the commercial banking unit of Santander Brazil
- Figure: Santander awards affluent customers with exclusive services but there is a large gap between the mass affluent and HNW propositions
- Figure: The Santander Unlimited MasterCard Black offers numerous benefits
- Figure: Santander has a large social media presence but its private banking unit remains unconnected