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New Tiburon Research Report - An Initial Overview of the Upscale Channels: Seeking to Serve the Ultra Affluent

Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, is pleased to announce the release of its newly updated research report on Upscale Channels. This research release summarizes some of the report's key findings.

Please click the image above to view the table of contents for Tiburon's An Initial Overview of the Upscale Channels: Seeking to Serve the Ultra Affluent Research Report

The purpose of this report is to provide readers with an initial understanding of the various upscale channels, including private banks, investment banks, processing banks, separate account managers, investment consultants, sports agents & business managers, and family offices. This is Tiburon’s second draft of this report.

Tiburon’s first draft of this report was written earlier in 2008; that draft sought to consolidate Tiburon’s prior research on this topic.

This is Tiburon’s second draft of this report; this draft substantially enhances the profiles of some core Tiburon clients, including City National Corporation and State Street Corporation.

Key Findings
This report has a long list of interesting facts to share:

Evolution of the Upscale Channels Industry
This chapter outlines through the history of the upscale channels industry.

Market History

  • The upscale channels firms have emerged in three phases led by the early private banks, family office & investment banks emergence, followed by the later private banks & investment banks emergence and the investment consultants, separate account manager, and sports agent & business manager emergence phase
  • The Bank of New York Mellon Corporation’s predecessor Bank of New York is proud of its 1784 founding by Alexander Hamilton as the first bank in New York
  • Bank of America Corporation’s US Trust subsidiary was founded in 1853.
  • Goldman Sachs Group was founded in 1869
  • The Bank of New York Mellon Corporation’s predecessor Bank of New York was established in today’s form by the 1922 merger of First Bank of New York and New York Life Insurance & Trust
  • Dodge & Cox was founded in 1930 to provide professional investment management services to mutual funds, retirement funds, tax-exempt institutions, and individuals. Dodge & Cox was founded by Van Duyn Dodge & Morris Cox. It is based in San Francisco, CA
  • Goldman Sachs Group went public in 1999
  • The Bank of New York Mellon Corporation was formed by the merger of Bank of New York and Mellon Financial Corporation in 2006

Market Definition

  • The upscale channels firms have slightly more than 140,000 employees
  • The upscale channels firms have $35.2 trillion assets under administration
  • The upscale channels firms have $5.2 trillion assets under management
  • The upscale channels firms custody $30 trillion
  • The upscale channels firms earn $15.5 billion in net income

Market Segmentation

  • Processing banks account for the greatest number of employees in the upscale channels with nearly 70,000 employees
  • Processing banks manage the most assets in the upscale channels with $3 trillion assets under management
  • Private banks have over $500 billion assets under management
  • Private banks earn nearly $1 billion in net income. More specifically in 2006 private banks earned $989 million
  • Only a handful of high net worth investors believe that private banks are capable of designing estate plans that maximize the benefits of life insurance
  • There are slightly over 51,000 investment banks & boutique brokerage employees within the upscale channels industry
  • Investment banks & boutique brokerage firms earn $11.3 billion in net income
  • Goldman Sachs Group leads the investment banks & boutique brokerage firms channel with 22,000 employees
  • Goldman Sachs Group leads the investment banks & boutique brokerage firms channel with $9.3 billions in net income
  • Processing banks generate $7.5 billion of revenues, an increase of over 10% since 2000
  • The Bank of New York Mellon Corporation leads the processing bank channel with over 40,000 employees, 50% more than State Street Corporation
  • State Street Corporation leads processing banks with $20.7 trillion assets under administration, 20% more than The Bank of New York Mellon Corporation
  • The Bank of New York Mellon Corporation leads processing banks in net income, earning $2 billion, $700 million more than State Street Corporation
  • The Bank of New York Mellon Corporation leads processing banks with a market capitalization of nearly $51 billion, $20 billion more than State Street Corporation
  • Brown Brothers Harriman leads the separate account managers with $40 billion assets under management
  • Investment consultants advise $6.4 trillion
  • Investment consultants generate nearly $1 billion in revenues
  • Callan Associates Leads the Investment Consultants Channel With 500 Clients
  • Sports agents & business managers formed when they noticed that very specific professional athlete & entertainer clients had specific needs that could not be served by traditional channels
  • The family office trend is being fueled by dissatisfaction with bank trust departments, which also tend to neglect new money

Future Predictions for the Upscale Channels Markets
This section outlines the future predictions for the upscale channels industry.

  • The upscale channels will see increasing growth as baby boomers age
  • The upscale channels industry is expected to have a larger number of assets under management
  • The upscale channels will see increasing use of alternative investments
  • The upscale channel business will see increasing industry consolidation
  • Specifically, consolidation is likely in the private banks, investment bank and boutique brokerage firm, and separate account manager business

To better understand the developments in Upscale Channels, executives can purchase Tiburon's An Initial Overview of the Upscale Channels: Seeking to Serve the Ultra Affluent research report where the key findings highlighted above are covered in greater detail. Please contact Sarah Sage at SSage@TiburonAdvisors.Com or 415-789-2540.

More Information

The following links will open specific pages on Tiburon's web site:

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Tiburon Strategic Advisors

Tiburon Strategic Advisors, based in Tiburon, CA, was formed in 1998 to offer market research & strategy consulting services to all types of financial institutions and investment managers:

  • The firm has served over 300 corporate clients and completed over 1,100 projects since its founding, and today, its knowledge base includes mutual fund distribution, separately managed account programs, alternative investments, wealth management, insurance products, banking services, the fee-only financial advisor market, the CPA firm market, the family office market, and various international markets.
  • Tiburon holds a series of CEO Summits semi-annually for its executive-level clients. The next CEO Summit is scheduled for October 14-15, 2008 (San Francisco, CA) at the Ritz Carlton Hotel in San Francisco, CA. 2009 dates are April 9-10, 2009 (New York, NY), and October 7-8, 2009 (San Francisco, CA). Attendance is by invitation only and attendance at each Summit is limited to 125 senior industry executives. Visit the CEO Summits section of Tiburon's web site for details on current and past CEO Summits, including attendee lists, meeting agendas, and highlights. Please contact Tiburon's Managing Principal Chip Roame at CRoame@TiburonAdvisors.Com or (415) 789-2541 if you are a Tiburon client and have an interest in attending a future Tiburon CEO Summit.
  • Tiburon has published forty-two ~300-400+ page research reports, which offer detailed analyses of growing business segments; each is available for $5,000; these reports can be ordered by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
  • Tiburon offers an annual research report retainer service, whereby dozens of clients receive all Tiburon reports published within a year for $25,000; clients can subscribe to Tiburon's 2008 Research Report Retainer by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
  • Tiburon also offers a database access program, whereby it shares its 300,000+ person industry executives contacts database with dozens of clients for $25,000 per year (distributed quarterly); clients can subscribe to Tiburon's Database Access Program by contacting Sarah Sage at SSage@TiburonAdvisors.Com or (415) 789-2540.
  • Tiburon offers thirteen online business benchmarking tools that are available to all types of financial advisors in an effort to help them benchmark their business practices and build more successful businesses. The sites include www.BrokerBestPractice.Com for wirehouse & regional brokers, www.FABestPractices.Com for fee-only financial advisors, www.IndependentRepBestPractices.Com for independent reps, and www.PrivateBankerBestPractices.Com for private bankers. Almost 5,000 advisors have used these tools. By completing one of the online surveys, financial advisors can access a FREE copy of the relevant comprehensive Tiburon research report, which summarizes and analyzes the collective results.
  • Tiburon's weekly research releases, like this one, are emailed for free to interested industry executives, media representatives, conference planners, and individual financial advisors. Over 55,000 industry executives now receive these releases. Feel free to sign up to receive future research releases at Tiburon's web site (www.TiburonAdvisors.Com) if this release was passed to you by a colleague and you would like to receive them directly in the future.
  • Tiburon plans to expand its workforce in 2008-2009. Specifically, the firm plans to add two-to-three incremental principals (the most senior role at the firm) and several more research managers in 2008-2009.
  • Tiburon has built three executive programs (CEOs-in-Residence, Financial Advisor Roundtable, and Consulting Fellows) in an effort to bring the experiences of additional senior level industry executives to Tiburon clients. Feel free to contact any of the members of Tiburon's executive programs directly or ask that they be included in any ongoing Tiburon has built three executive programs (CEOs-in-Residence, Financial Advisor Roundtable, and Consulting Fellows) in an effort to bring the experiences of additional senior level industry executives to Tiburon clients. Feel free to contact any of the members of Tiburon’s executive programs project.

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