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More Wealth Managers to Compete With Banks

May 13, 2008, 1:48PM
Morgan Stanley looks to expand wealth management

© 2008 The Associated Press

"NEW YORK — Morgan Stanley said Tuesday it will look to grow its business, especially its global wealth management operations, through acquisitions.

In a presentation at the UBS 2008 Global Financial Services Conference, Morgan Stanley's co-president, James Gorman, and executive vice president and chief financial officer, Colm Kelleher, discussed the investment bank's growth strategies as it looks to stabilize and build its business in the wake of a global credit crisis.

Growth through acquisitions is part of Morgan Stanley's third and final stage of growth in its global wealth management, Gorman said during the presentation.

Latin America, India, China and the Middle East are the international areas Morgan Stanley is targeting for growth, while it is also looking at major metropolitan markets within the U.S.

Morgan Stanley had $577.2 billion in assets under management during the first quarter. About $534.1 billion of the assets were in core asset management operations, such as equities and fixed income. The other $43.1 billion was managed through merchant banking operations.

Morgan Stanley, like other investment banks, has struggled in recent quarters due to rapid deterioration in the mortgage and credit markets. Rising defaults among mortgages, especially subprime loans given to customers with poor credit history, led investors to shy away from purchasing all but the safest debt.

That in turn forced investment banks to reduce the value of some of their investments to match current market values. Morgan Stanley has cut the value of its investments by nearly $13 billion since the middle of 2007.

Shares of Morgan Stanley fell 89 cents to $46.76 in afternoon trading."

Mina N. Sirkin is a Family Wealth Lawyer in Los Angeles County, California.  Ms. Sirkin is a Board Certified Specialist in Estate Planning, Probate and Trust Law by the Board of Legal Specialization of the State Bar of California.  [email protected].  http://www.SirkinLaw.com

UBS triples Taiwan branches in wealth management drive

"TAIPEI, April 14 (Reuters) - UBS (UBS.N: Quote, Profile, Research) (UBSN.VX: Quote, Profile, Research), the world's biggest wealth manager, said on Monday it had set up two more branches in Taiwan to bring its total on the island to three, as part of its broader drive to tap solid growth in Asia.

The Swiss bank opened two branches in central and southern Taiwan, bringing its total to 18 in six Asian countries, including China, Japan and Australia. In 2004, UBS had just three branches in Asia.

"Taiwan will remain a very important market for wealth management," Rory Tapner, chairman and chief executive for UBS, Asia Pacific, told reporters at an event to mark the openings.

"We have 380 staff in Taiwan. I'm telling you we don't have that kind of scale anywhere else."

Taiwan is Asia's No. 3 wealth management market behind Japan and China, attracting the likes of Citigroup (C.N: Quote, Profile, Research), HSBC (0005.HK: Quote, Profile, Research) (HSBA.L: Quote, Profile, Research), Standard Chartered (STAN.L: Quote, Profile, Research), AIG (AIG.N: Quote, Profile, Research) and other global players to boost their presence here.

UBS said last year that it aimed to double the size of its Taiwan private banking assets by 2009 as part of its planned expansion in the booming Asian market. [ID:nTP34765]

The main driver for Taiwan's growth would come from individuals who get their wealth from companies operating in China.

"Ninety percent of our potential clients are entrepreneurs," said Kathryn Shih, head of UBS Wealth Management, Asia Pacific.

UBS posted double-digit growth in revenues in the past two years in its Taiwan operations, whose core businesses are wealth management, asset management and investment banking, Tapner said. (US$1=T$30.33) (Reporting by Faith Hung; Editing by Anne Marie Roantree) (Reuters Messaging: [email protected]; +886 2 2508-0815))"

Mina N. Sirkin is a Board Certified Specialist attorney in Estate Planning, Probate and Trust Law by the Board of Legal Specialization of the State Bar of California.  Ms. Sirkin practices in Los Angeles County, California.   [email protected] .  http://www.SirkinLaw.com.