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.
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
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
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
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
