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UK's Rich Are Multi-Banked - Report
Stephen Harris
22 November 2005
The UK’s rich, the wealthiest 1 per cent by liquid assets, are multi-banked according to a new report from Tulip Financial Research. Base:
All HNWs & Ultra HNWs: The
UK’s wealthiest 1% HNW/Ultra HNW
Relationships: 000s Lloyds
TSB or Lloyds TSB Private Bank 174 Barclays,
Barclays Premier or Barclays Private Bank 137 NatWest
Bank or NatWest Private Bank 137 HSBC
Bank, HSBC Premier or HSBC Private Bank 132 Abbey 122 Halifax 122 RBS
or RBS Private Bank 85 Nationwide 80 Alliance
& Leicester 75 Bank
of Scotland or Bank of Scotland Private Bank 71 Egg 66 ING 61 First
Direct 42 Tesco 42 Sainsbury 19 Average
No. of Relationships 3.2
But the number of HNW & Ultra HNW relationships is only one measure of a bank brand’s wealth marketing opportunity. The other is the wealth owned by each relationship. Here ING tops the list with an average liquid wealth per HNW/Ultra HNW customer of over £6 million. Base:
All HNWs & Ultra HNWs: The
UK’s wealthiest 1% Average Liquid Assets: £ millions ING 6.15 Bank
of Scotland or Bank of Scotland Private Bank 5.75 Egg 5.45 RBS
or RBS Private Bank 4.95 NatWest
Bank or NatWest Private Bank 4.6 Sainsbury 4.6 Barclays,
Barclays Premier or Barclays Private Bank Abbey 4.25 HSBC
Bank, HSBC Premier or HSBC Private Bank 4.2 First
Direct 3.6 Nationwide 3.6 Lloyds
TSB or Lloyds TSB Private Bank Halifax 3.25 Alliance
& Leicester 2.95 Tesco 2.95
The research shows ING’s success in building an ultra wealthy customer base via a well promoted, easy access, high interest savings account. Egg has held on to a similar customer base, initially attracted by a similar launch platform. Base: The UK’s wealthiest 5% Average Liquid
Assets: £s % of UK Liquid
Assets Owned No. of individuals 000s The Mass Affluent (4% £144,000 15.5% 1,880 HNWs (0.7%) £665,000 12.8% 335 Ultra HNWs (0.3%) 6,442,000 48.8% 135 The UK Super-Rich £70,000,000 4.0% One
HNW & Ultra HNW Bank & Fund Manager Ratings reveals that most of this group have relationships with 3 or 4 of the main retail bank brands, and many have additional links with other specialist banks.
The report stresses the importance to the main retail banks of identifying their high net worth and ultra high net worth customers – those the report defines as having investible assets of over £2 million ($3.4 million). These are the prime market for savings and investment products.
Lloyds TSB tops the list with 174,000 HNW & Ultra HNW UK customer relationships, which accounts for 40 per cent of all UK HNWs & Ultra HNWs. Barclays, NatWest and HSBC are equal second, each reaching around 30 per cent of this group.
The Leading Bank Brands Ranked
The Leading
Bank Brands Ranked by
The Liquid Wealth of their HNW & Ultra HNW
Customers.
4.4
3.3
“Britain’s wealthy each use a range of banks: most have several current and savings accounts These valuable customers appear more loyal than they are as they hold on to accounts and rarely close them – bank accounts, even dormant ones, are useful properties. Hence the big bank brands have many HNW and Ultra HNW customers of which they are unaware, as bank accounts often reveal little of their owners’ real wealth,” said John Clemens, Managing Partner of Tulip Financial Research.
Figure 3 below shows the current breakdown of liquid wealth in the UK within the UK’s Wealthiest 5%. It is included to provide additional background information on the HNW and Ultra HNW wealth market.
Figure 3: Liquid Asset Ownership within the
Wealthiest 5% of UK Adults