Wealth Management in Russia 2009

Wealth Management in Russia 2009 published by Datamonitor in January, 2010. This report consists of 39 pages and the price starts from US $ 4495.

Introduction

Abstract

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 of this research

• 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.

Research and analysis 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.

Key reasons to purchase this research

• 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.

Table of Contents

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

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

• The Wealth Management Opportunity Index
  • Wealth management market features
  • Russian HNW client characteristics

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

• 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

• Bibliography
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

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

FIGURES

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

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