Wealth Management in Russia 2009

Date: January 1, 2010
Pages: 39
Price:
US$ 4,495.00
Publisher: Datamonitor
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: W191FB0A929EN
Leaflet:

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Wealth Management in Russia 2009
Introduction

The wealth management market in Russia is becoming much more competitive, spurred on by the growth of domestic providers. Russian high net worths, however, remain unsophisticated and staunchly conservative when it comes to investments. To succeed in the country, wealth managers need to know what this lucrative customer wants from them, in terms of products, services and interactions.

Scope

  • Sizes, segments and forecasts the number of affluent individuals across 10 liquid asset bands from EUR50k.
  • Primary research among domestic wealth managers provides insight into HNWs and the private banking market.
  • Utilizes Datamonitor's proprietary Wealth Management Opportunity Index to score the attractiveness of the market.


  • Highlights

    Russia has undergone a long period of economic and political upheaval and its burgeoning wealth market has experienced mixed fortunes. The relatively steady growth that characterized the Russian economy gave way to a much poorer performance by 2008. Nonetheless, the declines in the wealth of Russia's affluent population have been relatively modest.

    Although Russian HNWs are relatively unsophisticated and conservative when it comes to their wealth, they are business savvy and know when to take a risk. Wealth managers need to cater for this by offering them: friendly, personal service; understandable products; and customized education to extend their investment knowledge.

    Russia has a significant number of domestic wealth management players, although the landscape for this sector in Russia is changing, with the presence of an increasing number of international banks creating a more competitive market for the management of wealth.

    Reasons to Purchase

  • Understand Russian HNWs' attitudes and investment behaviour, and the expectations they have of their wealth managers.
  • Gain insight into the competitive characteristics of the Russian wealth management market, and learn the factors for success.
  • See how Russia's wealth management market scores against Datamonitor's Opportunity Index.

  • Overview
    Catalyst
    Summary
    Methodology
    Executive Summary
    In the context of the economic and market woes, the falls in wealth have been relatively modest
    HNWs are relatively unsophisticated on investment matters, loyal and very conservative
    Russia is becoming more competitive for wealth managers
    Table of Contents
    Table of tables
    Table of figures
    Table of figures
    Russia's Wealth
    Russia's fortunes are very much linked to the vagaries of oil and gas
    After a bruising 2008, the Russian Stock Exchange bounced back strongly in 2009
    The property market has also given up gains made in prior years
    Deposit rates and money market rates have offered modest returns to Russian investors
    Russian investors have the vast majority of their liquid assets in deposits
    The fall in the market has increased the importance of deposits over other asset classes
    The recessionary environment has taken its toll on Russian HNWs in 2008
    The declines have been modest and Datamonitor expects a rapid growth in wealth going forward
    The value of wealth held by affluent shows associated growth rates
    The Evolution of Russia's Wealth Management Market
    Russia's wealth management market has its origins in the economic reforms of the former Soviet Union
    The burgeoning wealth market in Russia has given rise to opportunities for domestic and international wealth managers who invest clients' money onshore and offshore
    Domestic Russian banks have expanded their businesses to offer HNWs a range of wealth offerings
    International banks have started to significantly expand their wealth management operations into Russia
    The Russian wealth market is a competitive space for both onshore and offshore funds
    Encouraging the take-up of a broader range of investment products is a challenge for wealth managers in Russia
    The Wealth Management Opportunity Index
    Wealth management market features
    Range of products and services: 0
    Level of consolidation: 1
    Ease of market entry: 2
    Level of international wealth management activity in the country: 1
    Russian HNW client characteristics
    Level of use of onshore services: -1
    Level of demand for high quality service: -2
    Appendix
    Datamonitor's 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
    Institutional factors
    Economic variables
    Wealth management market size
    Wealth management market features
    Wealth management client characteristics
    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
    The UK sub-model
    Global sub-model (for all other countries)
    Forecasting methodology
    Continuous refinement to the understanding of liquid wealth distribution
    Datamonitor's wealth numbers compared with other wealth numbers
    Bibliography
    Further reading
    Ask the analyst
    Datamonitor consulting
    Disclaimer

    LIST OF TABLES

    Table 1: Market capitalization of Central and Eastern European stock exchanges
    Table 2: Short-term deposit and money market rates, and change in consumer prices in Russia
    Table 3: The portfolio allocations of retail investors in Russia
    Table 4: Number of individuals in Russia in euro bands (000s)
    Table 5: Forecast number of individuals in Russia in euro bands (000s)
    Table 6: Value of onshore liquid assets in Russia in euro bands (€bn)
    Table 7: Forecast value of onshore liquid assets in Russia in euro bands (€bn)
    Table 8: Wealth Management Opportunity Index: Russia
    Table 9: Wealth Management Opportunity Index: Russia

    LIST OF FIGURES

    Figure 1: 2008 marked a turning point in the fortunes of Russia's labor market
    Figure 2: The Russian Stock Exchange fell dramatically between the end of 2007 and 2008
    Figure 3: Rates of return on deposits and in the money market have run at mid-single digits
    Figure 4: Deposits dominate retail investors' portfolios in Russia
    Figure 5: The number of wealthy individuals in Russia declined over 2008
    Figure 6: The number of wealthy individuals in Russia is set to rise rapidly from 2009 onwards

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