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Wealth Managers Shun Transparency, New Research Claims

Harriet Davies, Editor - Family Wealth Report, 18 May 2011

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Despite much talk of its importance, some of the world’s most important wealth managers are shunning transparency in their practises, new research by the Geneva-based firm MyPrivateBanking reveals.

Despite much talk of its importance, wealth managers are shunning transparency in their practises, new research by MyPrivateBanking reveals.

Research into some of the world’s most important wealth management firms found that only 22 per cent offer specific information on their fees, while 10 per cent publish performance data for their discretionary accounts, according to the Geneva-based research and networking platform.

The results are based on an analysis of the public websites including all the reporting documents that the 40 largest wealth managers worldwide publish online, MyPrivateBanking said.

“While most countries require extensive transparency on mutual funds such as performance data after fees, the total expense ratio, twice-yearly publication of fund holdings, the benchmark index, there is very little disclosure to the public on the discretionary accounts by private banks and wealth managers,” the firm said in a statement.

Of the surveyed websites, 35 per cent of the banks and wealth managers discuss costs and fees in general terms; 22 per cent give some quantitative information, and 18 per cent offer precise, quantitative information on various wealth management fees.

On the performance side, 13 per cent of the analyzed private banks discuss the topic of their performance in general terms; 10 per cent offer some quantitative data on their discretionary accounts’ performance, and 8 per cent offer a three-year track record (or more) on the performance of their discretionary accounts.

“Wealth managers are acting in a comparable role to fund managers when managing their clients’ wealth through discretionary accounts. Consequently they should offer the same level of transparency to the public,” MyPrivateBanking said.

“They should use the internet as an effective communication channel for disclosure and distinguish themselves from competitors by a high level of transparency,” it added.

The firm analyzed the following websites for its research: ABN Amro, ANZ, Banco Bilbao Vizcaya Argentaria, Bank of NY Mellon, Banque Pictet, Barclays, BNP Paribas, Citibank, Clariden Leu, Coutts & Co, Credit Agricole, Credit Suisse, DBS Bank, Deutsche Bank, Erste, Goldman Sachs, HSBC, ING Group, Itau Private Bank, JP Morgan, Julius Baer, Kleinwort Benson, Kotak Mahindra Bank, Lombard Odier, Macquarie, Merrill Lynch, Morgan Stanley, Nordea, RBS Coutts, Rothschild, Royal Bank of Canada, Sal Oppenheim, Santander, SEB, Societe General, Standard Chartered, US Trust, UBS, Vontobel and Wells Fargo.

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