Archive for October, 2014

DBS exec named world’s best private-banking leader

DBS’ group head of consumer banking and wealth management, Tan Su Shan, has been recognised as the world’s best leader in private banking, a first for a Singaporean.

She won the accolade at the prestigious PWM/The Banker Global Private Banking Awards in Geneva on Wednesday night.

DBS also beat out other banks in the world to be named the best private bank in use of technology. In addition, it received the best private bank in Singapore accolade for the fifth consecutive year.

Yuri Bender – editor-in-chief of PWM, Financial Times Group – said of DBS: “DBS Bank has featured regularly in the PWM Global Private Banking Awards, having won the Singapore category several times. The judges noted that it is still in premier position in this country, despite almost cut-throat competition from local, regional and global players.

“However, what has marked the 2014 awards has been the emergence of DBS as a key player in a number of other categories.”

On Ms Tan’s win, Mr Bender said she received close to unanimous backing from the judges and stood out among a list of 30 leaders from banks in North and Latin America, Europe and Asia.

“Although she has had a high profile in Singapore for many years, it was felt that her time has finally come, particularly regarding her leading role in the acquisition of the Asian private-banking business of French bank Societe Generale,” he said.

Recently, DBS completed the acquisition successfully, increasing its high-net-worth assets under management and assets under management for all wealth customers to $88 billion and $129 billion respectively.

Ms Tan said she was honoured by her win. “Over the years, Singapore has grown in stature as a leading wealth-management hub and it has been a joy to participate in its development,” she said.

On the award for best private bank in use of technology, Mr Bender said DBS received plaudits for its innovations in this area, including the way it has observed and adapted ideas pioneered in other Asian banks and non-financial companies.

“Research from the Aite group, which underpinned the decision-making process, shows that DBS has been one of the global leaders in both digital innovation to improve communication with private clients and broader implementation of larger-scale technology projects,” he added.

The Global Private Banking Awards 2014 is presented by PWM and The Banker, wealth publications by the Financial Times Group. The awards honour the best private banks in the world based on growth and performance.

The judging panel consists of 15 industry professionals from North America, Asia, Europe and the Middle East.

This article by The Straits Times was published in MyPaper, a free, bilingual newspaper published by Singapore Press Holdings.


Friday, October 31st, 2014 EN No Comments

ECB picks 4 asset firms

The ECB has picked four asset managers to aid purchases of asset-backed securities that it says will start next month.

ING Investment Management, Deutsche Asset Wealth Management International, State Street Global Advisors, and Amundi will execute transactions for national central banks, the ECB said yesterday.

The four asset managers will act on “explicit instructions” from officials, who “will undertake price checks and due diligence prior to approving the transactions”.

The ECB started buying covered bonds last week in the first step in a purchase programme aimed at expanding its balance sheet by as much as €1 trillion. While its main objective is to fight low inflation in the eurozone, the addition of asset-backed securities to its purchases also aims to revive Europe’s securitisation market.

“In contrast to covered bonds, the ECB has not much experience in buying asset-backed securities,” said Ruben Van Leeuwen of Rabobank. “However, the asset class is well suited for credit easing, and that’s already working.”

In its third foray into that market in six years, the ECB settled €1.7bn of covered-bond purchases last week after acquiring securities in the secondary market. The ECB bought bonds in the new-issue market for the first time this week, according to sources, and ABN Amro Bank said it may buy a portion of the €750m bonds sold yesterday by Italy’s Credito Emiliano.

Bayerische Landesbank, Germany’s second-biggest state-owned lender, said it will return €1.1bn to the state of Bavaria after selling asset-backed securities with a nominal value of €6.5bn in an auction, taking advantage of a rally in prices spurred by the ECB’s purchase plans.

ECB president Mario Draghi has said purchases of asset-backed debt will start before the end of the year and may include notes from the junk-rated nations of Greece and Cyprus. He has made the revival of the asset-backed securities market, which has shrunk more than 40% since 2010, a top priority, arguing it will allow banks to increase lending and boost economic growth.

Banks create asset-backed notes by bundling individual loans such as mortgages, car credit, and credit-card debt into tradable bonds.

The notes allow the transfer of risk from banks to investors and may encourage them to offer more credit.


Friday, October 31st, 2014 EN No Comments

Avaloq builds out its Australian team

PDF version


Thursday, October 30th, 2014 EN No Comments

Profile: Thurleigh chair Rosier on plans for the combined Ingenious AM

Of the list of potential partners Thurleigh could have thrown its lot in with, Ingenious Asset Management is the clear winner on one key metric: its offices are among the few that could compete with Thurleigh’s former Piccadilly bolt-hole for pure personality.

It’s a different kind of personality – located as it is in the heart of Soho’s medialand and kitted out in primary colours which have aged as well as can be expected for something once the height of fashion – than Thurleigh’s slightly down-at-heel two-room office, decorated with kitschy 1950s cigarette ads, before the two businesses began co-habiting in April, but equally distinctive.  

Thurleigh co-founder and now chair of the business within Ingenious AM, David Rosier laughingly disabuses Wealth Manager of the notion it was the expanse of op-art and trendy furniture that gave Ingenious a critical advantage in nailing the tie-up, creating a business with £1.7 billion in assets.

Publicly billed as a merger, the marriage was in reality an acquisition, with Ingenious Group founder and chief executive Patrick McKenna buying out Rosier and co-founder Charles Mackinnon’s equity for an undisclosed sum.

This was an eventuality which, to his credit, Rosier had for many years openly told interviewers was a possible end game for the company.


The ties that now bind Thurleigh staff to the group are strictly contractual (although Rosier notes that of the two staff who did not make the move, manager Caspar Helmore has returned to education and Luca Serino is pursuing his musical dreams with band The Fireflies).

While his chairmanship is very definitely executive, using the contact book that comes with 36 years in the industry to expand Ingenious’s charity book alongside other projects, Rosier says the decision to sell was at least partly a reflection of where both men found themselves in their careers.

‘It was a great experience building a pretty successful private client business and would have been lovely if we could have kept on growing it to pass on to the next generation. But we felt we owed it to clients and possibly more importantly prospective clients to answer the question of how long we are going to keep on doing this? I am 63, Charles is 59,’ he says.

‘That, combined with an increasing burden of regulatory costs, meant that had we kept on going we would have had to invest significant amounts of capital in the business. Until now we have had an external compliance officer for instance, and to keep up with the amount of documentation we now have to file with the Financial Conduct Authority (FCA), we would have had to recruit a full-time employee.


‘We have been pretty successful without either but we would have had to consider investing in sales and marketing if we wanted to keep on growing the business. We needed a financial partner, and Ingenious ticked all of our boxes. They were very generous in describing it as a merger, but in the end they bought the business – and we brought them expertise that they arguably didn’t have,’ he adds.

‘It has been interesting to talk to people since we joined. The investment directors have very much welcomed the fact that Charles in particular has a lot of experience in fixed income. [With] a lot of the Ingenious staff, while very experienced, the depth of their experience is in equity markets.’

Rosier is sanguine about how and why the regulator has moved to enforce suitability as an all-encompassing consideration for private client management. He adds, however, that this has unavoidably weighted the industry structure toward a higher minimum market capitalisation than has been true even in the relatively recent past.

He says had he and Mackinnon been considering making the move from a large bank to set up their own independent shop today rather than nine years ago, they would have had to do much more than put their money down and gauge support among their clients.


‘The difference is, nowadays we would have to raise capital. It would be possible to do it but we would have had to work much harder to find backing – from private equity, or whatever,’ Rosier says.

‘I still feel optimistic for the smaller end of the [wealth management] sector because I’m fundamentally an optimistic person. But also because however hard large organisations try to avoid treating their clients like account numbers it will still inevitably happen, and there will always be people who feel safer and happier at small organisations, and place a premium on counting for something.

‘Generally, we are required to do more and more reporting and ensure more files are sent into the FCA on a weekly basis. The whole emphasis on suitability is excellent, but to get that right and do it thoroughly is a huge task. It is [objectively] a good thing but you need to have a member of staff doing that full time. Here [at Ingenious] we have three.’

He estimates that to really be competitive, expansionary and long-term sustainable in the current market a discretionary management business needs to be able to draw on the annual fees of around £1 billion in assets, or to have deep enough pockets to keep the business running as if it did until it can get there.   


Nonetheless, he believes there are continuing barriers to consolidation at the bottom end of the sector, a phenomenon that seems borne out by increasing jockeying to consolidate assets in the mid-field and upper end, and less activity at the very bottom.

Now on the acquisitive end of the corporate scale – in addition to its organic growth areas in trust businesses and intermediated adviser assets Ingenious is still actively considering opportunities – Rosier says many small operators insist they come with their clients as a full package.

In contrast to the advisory sector in which many practitioners have cashed out and taken retirement rather than go back to school to train to new statutory-minimum qualification levels, many practitioners at the lower end of the private client industry tend to be young enough that they still need to work, and not yet mentally ready to give up their client relationships, he adds. 

‘It’s also about keeping hold of the recurring revenues and keeping hold of the relationships, while wanting to give up some of the paperwork.’

Real consolidation would be difficult so long as it remained conditional on taking on a great deal of personnel and key-staff risk via staff integration, he says.


‘In big deals, you want to keep the people in place when clients make the transition – until they decide to change the structure because it does not meet their internal return on equity, as tends to happen in big organisations. At the smaller end, it tends to be much more a people business, for good and bad.’

The combined Thurleigh-Ingenious group, which says it intends to retain the Thurleigh brand, sits between these two extremes with around 40 staff, up from little more than 10 previously. Showing Wealth Manager into the conference room, Rosier and Mackinnon’s PA Sally Price notes how nice it is to finally have other people available to handle all the tea-making duties in addition to managing his diary.    

Of the company’s £1.7 billion under management, £150 million is run for advisers on external platforms, while £168 million is run for charities. Both of these have strong growth potential, Rosier says. ‘If you look at the IFA client business, that is one person who manages all that. It’s not labour intensive.’

Performance has been decent. The Ingenious Balanced Strategy is up 43% over five years versus the ARC Sterling Balanced Index return of 31.79, and over three years 23.39% versus 24.8%.

While many might have chosen to take the cheque and take up gardening, Rosier insists he is not planning his imminent retirement.

‘I’m here as long as they’ll have me,’ he says.   



Thursday, October 30th, 2014 EN No Comments

The end of QE good for the markets?

Now watching

Next video starts in : 7

The end of QE good for the markets?

The end of QE good for the markets?

Up next

Now I Get It: Senate Midterm Elections


Wednesday, October 29th, 2014 EN No Comments

Wealth Report : There were 79346 HNWIs in Israel in 2013

Wealth Report : There were 79,346 HNWIs in Israel in 2013


WhaTech Channel: Consumer Market Research Reports

Published: Wednesday, 29 October 2014 19:43

Submitted by Vijay Pathania WhaTech Pro

News from:
JSB Market Research

Read: 3 times

JSB Market Research announced latest market research report Titled “Israel Wealth Report 2014”

Israel Wealth Report 2014 report is the result of extensive research covering the high net worth individual (HNWI) population and wealth management market in Israel.

This report reviews the performance and asset allocations of HNWIs and Ultra-HNWIs in Israel. It also includes an evaluation of the local wealth management market.

Independent market sizing of Israel HNWIs across five wealth bands
HNWI volume, wealth and allocation trends from 2009 to 2013
 HNWI volume, wealth and allocation forecasts to 2018
HNWI and UHNWI asset allocations across 13 asset classes
Geographical breakdown of all foreign assets
Alternative breakdown of liquid vs investable assets
Number of UHNWIs in major cities
Number of wealth managers in each city
City wise ratings of wealth management saturation and potential
Details of the development, challenges and opportunities of the Wealth Management and Private Banking sector in Israel
Size of Canadas wealth management industry
Largest private banks by AuM
Detailed wealth management and family office information
Insights into the drivers of HNWI wealth

Complete Report is available @

The Israel Wealth Report 2014 is an unparalleled resource and the leading resource of its kind. Compiled and curated by a team of expert research specialists, the report comprises a wide variety of data that is created based on over 110,000 HNWIs from around the world in our database.

With the wealth reports as the foundation for our research and analysis, we are able obtain an unsurpassed level of granularity, insight and authority on the HNWI and wealth management universe in each of the countries and regions we cover.

The report reviews the performance and asset allocations of HNWIs and Ultra-HNWIs. The report also includes projections of the volume, wealth and asset allocations of the HNWIs to 2018 and a comprehensive background of the local economy.

The report provides a thorough analysis of the private banking and wealth management sector, latest merger and acquisition activity, and the opportunities and challenges that it faces.
It also provides detailed information on HNWIs volumes in each major city.

Key Highlights

There were 79,346 HNWIs in Israel in 2013. These HNWIs held US$421 billion in wealth.

In 2013, Israeli HNWI numbers rose by 6.2%, following a decrease of 1.5% in 2012.

Growth in HNWI wealth and volumes are expected to improve over the forecast period. The number of Israeli HNWIs is forecast to grow by 8.8%, to reach 88,131 in 2018. HNWI wealth is projected to grow by 19.9%, to reach US$535 billion by 2018.

In 2013, Israeli HNWIs held 24.2% (US$102 billion) of their wealth outside of their home country; the worldwide average is 20–30%.

Table of Contents

1 Introduction
1.1 Details of this Report
1.2 Definitions

2 Executive Summary

3 Wealth Sector Fundamentals
3.1 Political Background
3.2 Economic Background
3.3 Social Background
3.4 Benchmarking Israel’s Wealth in Context
3.4.1 Distribution of wealth in Israel
3.5 HNWI Volume and Wealth Trends

4 Findings from the WealthInsight HNWI Database
4.1 Trends in HNWI Wealth to 2018
4.1.1 HNWI trend analysis
4.1.2 Trends of the wealth bands
4.1.3 Demographic breakdown of HNWIs
4.1.4 HNWIs – job titles
4.1.5 HNWIs – industry breakdown
4.1.6 HNWIs – industry performance
4.1.7 HNWIs – breakdown by city
4.1.8 HNWIs – city performance
4.1.9 HNWIs – city population densities
4.1.10 HNWIs – city forecasts
4.1.11 HNWIs – breakdown by state
4.1.12 HNWIs – state performance
4.1.13 HNWIs – state population densities
4.2 UHNWIs
4.2.1 UHNWI volume trend analysis
4.2.2 UHNWI wealth trend analysis
4.2.3 Demographic breakdown of UHNWIs
4.2.4 UHNWIs – industry breakdown
4.2.5 UHNWIs – city breakdown and performance
4.3 UHNWIs – Billionaires
4.3.1 Billionaire volume trend analysis
4.3.2 Billionaire wealth trend analysis
4.3.3 Billionaire per capita net worth trend analysis
4.3.4 List of billionaires
4.4 UHNWIs – Centimillionaires
4.4.1 Centimillionaire volume trend analysis
4.4.2 Centimillionaire wealth trend analysis
4.4.3 Centimillionaire per capita net worth trend analysis
4.5 UHNWIs – Affluent Millionaires
4.5.1 Affluent millionaire volume trend analysis
4.5.2 Affluent millionaire wealth trend analysis
4.5.3 Affluent millionaire per capita net worth trend analysis
4.6 Core HNWIs
4.6.1 Core HNWI volume trend analysis
4.7 Core HNWIs – Mid-Tier Millionaires
4.7.1 Mid-tier millionnaire volume trend analysis
4.7.2 Mid-tier millionaire wealth trend analysis
4.7.3 Mid-tier millionaire per capita net worth trend analysis
4.8 Core HNWIs – Lower-Tier Millionaires
4.8.1 Lower-tier millionaire volume trend analysis
4.8.2 Lower-tier millionaire wealth trend analysis
4.8.3 Lower-tier millionaire per capita net worth trend analysis


News From

JSB Market ResearchJSB Market Research
Category: Market Research Reports


Wednesday, October 29th, 2014 EN No Comments

Aside from a few billion-dollar legal problems, UBS is doing pretty well

The numbers: Not bad, all things considered. Swiss banking giant UBS reported a third-quarter profit of 762 million Swiss francs ($802 million), up 32% from the same period last year. Although this was a bit lighter than the markets were expecting, investors were cheered by encouraging signs in the group’s wealth-management unit. aUBS’s shares rose by more than 4% in early Zurich trading.

The takeaway: The bank’s shift towards wealth management, and away from investment banking, is bearing fruit. The group’s wealth management division recorded its largest pre-tax profit since early 2009, thanks to big asset inflows from clients in Asia. Meanwhile, UBS’s beleaguered investment bank saddled the group with a pre-tax loss of 1.2 billion Swiss francs, thanks to a hefty legal charge.

What’s interesting: Lingering litigation issues continue to haunt UBS. The bank took provisions worth 1.8 billion Swiss francs against future legal costs in the third quarter, with ongoing cases that include allegations of manipulating the foreign exchange market, helping French clients evade taxes, and sundry other entanglements. Per usual, the “Litigation, regulatory and similar matters” section of the bank’s earnings report makes for interesting reading—this quarter’s edition runs to 10 pages. It’s not likely to shrink any time soon, with the bank warning that “charges associated with litigation, regulatory and similar matters will remain elevated for the foreseeable future.”


Tuesday, October 28th, 2014 EN No Comments

Deutsche Bank Targets Ultra Rich to Boost Asia Private Bank

epa03317085 (FILE) File picture dated 28 March 2007 of window cleaners at work on the glass facade of the Deutsche Bank headquarters in Frankfurt. Deutsche Bank share fell some three per cent in early trading 25 July 2012 after it reported a profit warning. The bank reported a net profit of some 700 million euro, while markets had expected some one billion. Deutsche Bank said it expects total net revenues of approximately EUR 8.0 billion for the second quarter (2Q2011: EUR 8.5 billion).  EPA/ARNE DEDERT

File picture dated 28 March 2007 of window cleaners at work on the glass facade of the Deutsche Bank headquarters in Frankfurt. (EPA/Arne Dedert)


Deutsche Bank AG’s Asia-Pacific wealth-management business aims to increase revenue by 20 percent in 2015 by targeting the region’s richest people.

The bank will seek new clients and try to lure money from existing customers as it focuses on individuals with at least $100 million of potential investable assets, said Mark Smallwood, Deutsche Asset Wealth Management’s head of franchise development and strategic initiatives in the region. It will focus on Singaporeans, Hong Kongers, Indonesians, Chinese and non-resident Indians, he said.

“The way we’ve played the game is to be extremely focused on our strengths, and our strength is the ultra-high net-worth space,” Smallwood said by phone from Hong Kong last week. He was commenting directly on the private-banking business of his unit, which also oversees asset-management operations such as mutual funds. He declined to disclose current client numbers.

Deutsche Bank, which manages about $97 billion at its Asia-Pacific asset and wealth-management unit, is among banks vying to tap the region’s growing ranks of rich individuals. The number of Asia-Pacific millionaires, which grew 17 percent last year, is expected to surpass North America by the end of 2014, Cap Gemini SA and Royal Bank of Canada said in a report this month.

Smallwood, 52, said the Frankfurt-based lender will woo Asia’s mega-rich by offering structured-finance products, hedging solutions and alternative investments such as private equity and infrastructure. The Asian wealth business’s revenue has quadrupled in the past five years, he said, declining to disclose last year’s growth.

Highest revenue

Assets at Asia’s top 20 wealth managers grew 12 percent to $1.36 trillion in 2013 from a year earlier, according to an Asian Private Banker study released Oct. 14. UBS AG’s $245 billion was the region’s largest total, while Citigroup was second with $218 billion. Deutsche Bank was fifth.

The ultra-high net-worth segment offers the highest revenue contributions and a perceived differentiation from other banks, according to Pathik Gupta, director and head of Scorpio Partnership for Asia.

“All the private banks with strong growth ambitions in Asia have invariably some form of ultra-high net-worth strategy,” Gupta wrote in an e-mail. His firm is a London-based consultancy for the wealth-management industry.

Deutsche Bank’s focus on the ultra-wealthy segment comes amid a push from the lender to expand asset and wealth management, which were combined into one unit in 2012 under Michele Faissola. That division accounted for 14 percent of Deutsche Bank’s revenue last year, up from 13 percent in 2012, data compiled by Bloomberg show.

Bigger pool

The unit managed about 955 billion euros ($1.2 trillion) globally at the end of June, with the Asia Pacific accounting for 8 percent of the total, according to data on the division’s website. The firm had 185 private bankers in the Asia-Pacific region, Smallwood said.

Deutsche Bank outsourced its back-office functions for wealth management in Singapore last month, enabling the firm to handle greater client volumes, Smallwood said.

Once the technology outsourcing takes effect in the first half of 2015, the bank will be able to broaden its strategy to focus on the high net-worth bracket of individuals with $2 million to $25 million of assets, he said.

Last year, Deutsche Bank moved its wealth management back-office processes in Switzerland to Avaloq Licence AG in a bid to cut costs. In Singapore, as many as 70 Deutsche Bank employees moved to Avaloq, Smallwood said.

To manage a large number of accounts, “you’ve got to have a very robust platform from a technology point of view to remain at an efficient cost-income ratio,” Smallwood said.



Tuesday, October 28th, 2014 EN No Comments

"2014 Top Five Star Wealth Managers In Atlanta"

ATLANTA, Oct. 28, 2014 /PRNewswire-USNewswire/ — Announcing a special recognition appearing in the October, 2014 issue of Atlanta Magazine published by Emmis Publishing Corporation. Jonathan Dickson was selected for the following honor:

“2014 Top Five Star Wealth Managers In Atlanta”

Jonathan Dickson Selected For 2014 Top Five Star Wealth Managers In Atlanta

Jonathan Dickson commented on the recognition: “This is quite an honor for me. The fact that Atlanta Magazine included me in its selection of 2014 Top Five Star Wealth Managers In Atlanta,” signals that my constant effort to deliver excellent work has paid off. It is gratifying to be recognized in this way.”

About Jonathan Dickson: a short profile by and about the honoree:

The Mercury Group at Morgan Stanley helps private clients and institutions implement customized goal based investment management and lending strategies We work primarily with individuals, corporations, and associations who have significant assets and desire a long term investment strategy designed to achieve a specific return goal The 3 key groups that make up the bulk of our practice are: 1. Individuals nearing retirement 2. Business owners and executives in the process of selling their business or receiving significant funding 3. Closely held captive insurance companies

Following the publication of Jonathan Dickson‘s selection for Atlanta Magazine‘s 2014 Top Five Star Wealth Managers In Atlanta list, American Registry seconded the honor and added Jonathan Dickson to the “Registry of Business Excellence™”. An exclusive recognition plaque, shown here, has been designed to commemorate this honor.

For more information on Jonathan Dickson, located in Atlanta, GA please call 404-459-3891, or visit

This press release was written by American Registry, LLC with contributions from Jonathan Dickson on behalf of Jonathan Dickson and was distributed by PR Newswire, a subsidiary of UBM plc.

American Registry, LLC is an independent company that serves businesses and professionals such as Jonathan Dickson who have been recognized for excellence. American Registry offers news releases, plaques and The Registry™, an online listing of over 2 million significant business and professional recognitions. Search The Registry™ at

Contact Info:
Jonathan Dickson
Phone: 404-459-3891
Email Address:

This award is not indicative of the financial service professional’s future performance. Working with any financial service professional is no guarantee as to future investment success nor is there any guarantee that the selected financial service professional will be awarded this accomplishment by this or any other publication in the future. The inclusion of an individual or firm in the Registry should not be construed as an endorsement of the individual or firm by The American Registry™ or the publication.

Photo –

SOURCE American Registry


Tuesday, October 28th, 2014 EN No Comments

Wealthfront Closes A Big New Round As Competitors Crowd The Wealth …

The automated wealth management firms (known as “robo-advisors”) that are bringing algorithmically enhanced services to the stodgy world of retirement planning are gearing up to go Terminator as competition intensifies.

In what’s sure to be the first shot in a salvo of big new rounds for these (no-longer) startups, Palo Alto, Calif.-based Wealthfront has raised roughly $70 million in a new round of financing, according to people familiar with the company’s plans. The new financing comes just six months after the company closed a $35 million round in April. There was no word on whether the new financing morphs Wealthfront into the mythical, billion-dollar “unicorn” status, but it should put the company in the “uni” range at least.

The timing of the round is auspicious. The boomer behemoth of wealth management and financial services, Charles Schwab Co., just announced that it was going to offer its own version of the robo-advisor called Intelligent Portfolios. While some of the early startup entrants into the market are skeptical of the quality of Schwab’s product (namely the algorithms), it’s a big move that both validates the market for a broader consumer audience and announces that Schwab isn’t going to go gently into its good night of irrelevance or cede its pole position as one of the top consumer wealth management firms.

Venture investors can sense that the wealth management industry has been slow to adopt new technologies and have been throwing money at the sector accordingly. Investments in personal finance and wealth management companies have already raised over half a billion dollars this year and the pace of investment seems to be holding steady, according to CrunchBase.

With the new financing, the pressure is on other companies in the space like Betterment, SigFig and PersonalCapital to raise significant rounds of their own. Most of these startups have also raised significant investment rounds this year, but as with the lending space earlier, the large rounds will probably continue to come.

Since 2011, Wealthfront has had phenomenal growth, reaching $1 billion in assets under management in less than two-and-a-half years. In a blog post when Wealthfront surpassed the billion-dollar threshold, chief executive Adam Nash attributed the company’s success to the millennial investor. Nash writes:

There are over 90 million Millennials in the US with an aggregate net worth of more than $2 trillion; by 2018 that is expected to grow to $7 trillion. This generation has a very different set of expectations about what they want from an investment service.

Millennials grew up with software and expect services to be delivered online. They don’t have the patience to have to talk to someone to complete their transactions. They lived through two market crashes and are highly cynical about the claim that you (or anyone) can outperform the market. They have been nickel-and-dimed through a wide variety of services, and they value simple, transparent, low-cost services.

Nash then related a story that Charles Schwab, the eponymous founder of Charles Schwab Co., told Wealthfront co-founder Andy Rachleff about the parallels between the two businesses. Schwab started with a client base in their 20s and 30s and that the brokerage grew as investors’ aged. Today, “Schwab has grown with the baby boomer generation to $2.3 trillion in client assets,” Nash writes. It took Schwab six years to reach $1 billion in assets. Nash wrote that he thinks Wealthfront is riding a bullet train instead of the baby boomers’ “Peace Train”.

A Wealthfront spokesperson declined to comment.

Photo via Flickr user Adil


Tuesday, October 28th, 2014 EN No Comments