US firms are setting their sights on Brazil's wealth management market, seen as a strong long-term prospect despite some recent market wobbles.

Big US banks have set their sights on the Brazilian private banking market by expanding their wealth management teams in the country.

Brazil has been one of the fastest growing private banking markets in the world and is living a less severe economic downturn than most countries. In the past few weeks, JP Morgan, Goldman Sachs, Bank of America Merrill Lynch and Citigroup have all announced plans to boost their businesses with wealthy clients in the country.

Some of the plans were announced to the Brazilian market during visits of top American executives to Brazil. One of them was the head of JP Morgan Asset Management, Jes Staley. He told newspaper Valor Econômico that the bank wants to boost its small private banking presence in Brazil by achieving organic growth. The head of private banking in Brazil is Celso Portásio, who is also responsible for the private banking area at Anbid, the Brazilian investment banking association. JP Morgan has offices in Rio de Janeiro, Porto Alegre and Belo Horizonte and has expressed intentions to open new offices in the country.

Goldman Sachs has hired Fernando Valada, previously the head of private banking at ABN Amro in Brazil, to lead its private banking unit in the country. The Wall Street firm has also been granted a licence by the financial authorities to set up an asset management unit, according to reports. Visiting São Paulo along with CEO Lloyd Blankfein at the end of June, president and chief operation officer Gary Cohn told the Brazilian media that wealth management is the sector where Goldman Sachs expects higher rates of growth in Brazil.

Bank of America, meanwhile, has announced that a wealth management unit will be created in the country. And Citi has revealed last week a change of strategy to increase its focus on well-off Brazilians, to the detriment of the lower levels of the retail market.

The attraction of Brazil to international banks is not difficult to grasp, according to experts. "Brazil has been one of the countries that has created the highest number of new private banking clients in recent years," says João Santos, a partner at PriceWaterhouseCoopers in Brazil.

But no foreign player is likely to have an easy ride in the country, he believes. Brazilians' perception of foreign banks has changed remarkably in the past two years and now they have to regain the trust of clients, he says. "Since the financial crisis started, there has been an important migration of private clients towards local players like Itaú Unibanco, Bradesco and Hedging Griffo," Mr Santos points out.

"Previously, foreign banks worked as a conduit for wealthy Brazilians to keep their assets away from problems created by domestic crisis. But in the current global crisis, it has been the opposite."

Richardo Anhesini, another partner at PriceWaterhouseCoopers in Brazil, says new entrants in the market could be trying to exploit the same phenomenom by targeting clients who have grown suspicious about boutique outfits. "Brands like JP Morgan, Goldman Sachs and Bank of America Merrill Lynch might offer the kind of solidity that private banking clients are seeking today," he remarks.

An important development for foreign private banks in Brazil has been the approval last year of a new family of funds for qualified investors (with over 1 million reais, to invest) that makes it easier to buy investment products in other countries. Hitherto, Brazilian investors were not allowed to do so legally, unless their advisors came up with creative offshore solutions. But now it may become easier for international banks to sell their global offer of financial products to wealthy Brazilians, according to Mr Santos.