Wealth managers are expanding their online capablities to give private clients greater control over their portfolios (EIU Report 2010)

The world’s high net worth individuals want a more active role in managing their investments, according to The New World of Wealth, a report published last week by the Economist Intelligence Unit, commissioned by French wealth manager SG Private Banking. Some clients are leaving to manage their own assets through online brokers – which charge a fraction of the costs – according to Swiss research group MyPrivateBanking. Others are depositing a relatively small amount of their assets at a bank to have access to research, special funds and services, and use the information to manage the majority of their assets with an online broker. To assuage their remaining dissatisfied clients, wealth managers are building their online private banking divisions, letting clients manage their portfolios at the touch of a button. The wealth management divisions of banks, including Swiss bank UBS, French bank Société Générale, UK bank Standard Chartered and US lender Bank of New York Mellon, say they are growing in this area. Last week, Canadian broker TD Waterhouse acquired 100% ownership of online Luxembourg-based private bank Internaxx. UK chief executive Angus Rigby said: “After the crisis, some of the more unwieldy private banks will be looking to reinvent themselves, and online is the obvious route. The lower cost of an actively managed online portfolio will also be attractive for private clients, who traditionally pay fees of between 1% and 3% of their portfolio. Rigby said Internaxx charges annual trading commission costs of €17, with a small management fee.The asset management division of Saxo Bank, an online Danish bank, last month launched a DIY equity platform to attract private clients who had lost faith in traditional banks and brokerages. Last year the bank grew assets under management 80% to €2.7bn ($3.7bn) and it said they grew a further 25% in the first quarter. The younger generation will also make an extensive online presence “mandatory”, according to Christian Nolterieke, managing director of MyPrivateBanking. He said: “Generation X is less impressed by a quarterly meeting in a nice restaurant and instead wants the ability to continuously monitor their portfolios.”Some industry participants remain sceptical as to whether private banks can give adequate data protection to clients if they move further into cyberspace. According to a report published by MyPrivateBanking, 61% of banks do not offer secure web messaging. Nearly 60% do not give privacy warnings to users of their websites about sending unprotected emails to recipients at the bank. To find out more about AG|Capital's Online Wealth Management solutions please contact us at contact@agdelta.com.