Euro boutiques need bold strategies to compete

FWR Staff

18 March 2005

Research firm thinks small wealth managers should think hard about ownership structure. European boutique firms have to be especially crafty if they hope to compete with established private banks in providing wealth management services to high-net-worth families and individuals, says Research and Markets, a Dublin-based clearinghouse for third-party business analysis.

The main problem is that small firms have less cash on hand than their big-name rivals. That limits their ability to develop their businesses and ride out bad patches caused by depressed markets or external shocks such as terrorism or war.

"Small independent wealth managers are far from doomed, but equally do not have universally good prospects," says Research and Markets, touting a $2,400 report that examines organizational size as a factor in providing wealth management services. "Those that fail to act to develop their future market position will suffer, but those that take a proactive approach to shaping their strategy and business model have a range of attractive options to pursue."

In that light, a boutique firm's choice of ownership structure can determine the range of strategic options it opens up for itself. That choice, in turn, can have an impact on the product-and-service proposition that a boutique can realistically deliver to its clients.

London-based Datamonitor's interrogatively titled report Will Organizational Size Be a Critical Success Factor in Providing Wealth Management Services to HNW Individuals? claims to help small wealth managers to identify their place "in the competitive landscape for wealth management services in Europe." It outlines the strengths, weaknesses, opportunities that typical European boutique wealth managers face, and uses case studies to describe ownership structures and business initiatives adopted by wealth industry players of different sizes.

Firms highlighted in the case studies include Ruffer, C. Hoare & Co., Tilney Investment Management and KBL Group European Private Bankers.

Click here to learn more about the report. -FWR