More than 75% of asset managers anticipate an increased focus on private banks and trust companies over the next two years, according to research undertaken by global analytics firm Cerulli Associates.
In its latest report, Cerulli found that asset managers in the United States are continuing to direct their focus on private bank and trust companies over the next two years and show no signs of decreasing.
“Private banks and trust companies control US$4.4 trillion in wealth management assets,” said Donnie Ethier, associate director at Cerulli. “By year-end 2020, this total is expected to reach US$5.5 trillion.”
Cerulli’s latest report, U.S. Asset Management Opportunities in Banks 2016: Evaluating the Progress Towards Open Architecture, is available now and focuses on the evolving relationship of investors, asset managers, and banks. The report aims to analyse the best-practice banks that have centralised the investment decision-making process across all of their wealth management platforms, including broker/dealer, trust department, registered investment advisor, and family office, Cerulli said.
“84% of asset managers expect to place a greater emphasis on the bank trust channel without increasing resources,” added Ether. “They will focus on better executing on the resources already dedicated to the channel. However, many are prepared to take additional steps if this proves to be inefficient.”
The report found that asset managers that once felt that private banks and trust companies were becoming stagnant are now reconsidering their positions as banks continue to ease the obstacles of gaining entry onto their platforms and are offering more competitive products. This has resulted in a greater emphasis on the private bank and trust companies, the report concluded