Investment strategies

Financial advisers were able to save their millionaire clients big money last year, helping to fortify the need and demand for good advice among the wealthy, Fidelity Investments found.

More than 25% of high-net-worth individuals either withdrew assets or closed their accounts with their wealth managers in 2008, according to the World Wealth Report, a survey of the 15 largest firms issued by Merrill Lynch Global Wealth Management and Capgemini. Instead, 30% of wealthy investors said they are likely to move their money to local and regional banks.The 15 asset managers surveyed lost an average of nearly 25% of their assets in 2008 after a 17% growth in 2007.“The good news is that it’s still a profitable business—just less profitable than before,” commented Bertrand Lavayssierre, managing director of global financial services at Capgemini.Wealthy clients moved 50% of their assets into cash or cash-equivalent assets, up from 44% in 2007 and 35% in 2006.

The number of millionaires in the world plunged 14.9% last year as the markets faced extreme losses and volatility, according to the Merrill Lynch/Capgemini 2009 World Wealth Report. This means there are fewer millionaires in the world today than in 2005. The number of ultra-high-net-worth individuals (those worth net assets of at least $30 million, not including their primary residence) also dropped 24.6%.

As the asset management industry will inevitably face more regulations, costs will increase and competition will intensify, giving the largest companies an advantage that will increase their market share. Those were some of the views of 225 asset managers from 30 countries that Create Research surveyed. The study was commissioned by Citi’s global transaction services group and Principal Global Investors.

Financial planners’ high-net-worth clients are asking for guidance on investing and spending, as they reassess their holdings following the devastation of 2008, the American Institute of Certified Public Accountants found in a survey.

Affluent investors' confidence increased in May for the third consecutive month, according to a survey by Spectrem Group.

Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust.

Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust.

Separately managed accounts were the hardest hit of all types of brokerage accounts, The Wall Street Journal reports. Assets fell 39%, from $750 billion at the end of 2007 to $460 billion at the end of last year, according to Cerulli Associates.

The Depository Trust & Clearing Corp. has created a web portal for its Managed Accounts Service, to make connectivity to the platform convenient and immediately accessible. The portal will be available in the third quarter.

Fidelity Investments, Bank of America and Goldman Sachs manage wealth for the largest percentage of U.S. millionaires, according to a survey by Fidelity.

Recognizing the need for asset management executives to receive timely insights from financial intermediaries on changing investor tastes, kasina and Hoursesmouth have launched Advisor Vision. Through surveys conducted among Horsesmouth’s 70,000 members, the service provides insight into advisers’ behaviors, preferences for working with asset managers and opinions on specific firms and investment choices.

The top wealth management executive at Beneficial Bank in Philadelphia said his unit aims to take advantage of its rivals' "distractions."

Bank of America is merging its premier banking into Merrill Lynch Global Wealth Management, and as a result, several hundred people will lose their jobs.

With mutual fund investors burned by negative returns of 30% to 50% over the past year, they are unlikely to remain confident about their investments, Celent predicts. As a result, the universe of 7,000 funds could shrink by as much as 70% over the next five years, leaving only 2,000 funds in existence.

Citi has created the first web-based platform to handle all of the various types of investment products inclued in a unified managed household account, with TIAA-CREF coming on board the first asset manager to sign on. TIAA-CREF will be using the platform, OpenWealth, in its fee-based wealth management division.

Invesco's Atlantic Trust Private Wealth Management plans to take advantage of the "chaos" in the financial services industry to add assets and customers, according to its new chief executive officer.

Since the onset of the credit crisis in August 2007, the financial services industry has lost 325,000 jobs around the world, according to the International Labor Organization.

Mutual funds' 2009 sales outlook is modest, according to Keefe, Bruyette & Woods.

Separately managed accounts’ claim that they pick only the cream of the crop to manage investors’ money appears to have dogged it in the fourth quarter, The Wall Street Journal reports. Disappointed in less-than-stellar returns, investors withdrew assets from SMA accounts held at brokerage firms at a far more rapid pace than they did from mutual funds.