The New York Times reports about Gordon Murray, a banker who has a deadly form of cancer who has written a book that “is itself a remarkable story of an almost willful ignorance of the futility of active money management - and [shows] how he finally stumbled upon a better way of investing. Mr. Murray now stands as one the highest-ranking Wall Street veterans to take back much of what he and his colleagues worked for during their careers”

It seems that the idea of passive, index-oriented money and wealth management is rapidly catching on. It is extraordinary that the New York Times runs such a prominent story promoting passive wealth management. It is another symptom of a changing investment paradigm. The wealth industry should listen to this dying man.

Barclays has just announced to open a new private banking center in Hong Kong and is seeking to quadruple its assets under management in the region, according to a Reuters news report. This is only the latest in a number of moves by various players to beef up their operations in Asia. Global players UBS, Credit Suisse, Deutsche Bank, Bank of America, HSBC and others are confronting more regional players like DBS in an increasing frantic struggle for new clients and assets. Target markets are mainly China, India and Indonesia. According to MyPrivateBanking analysis, the salaries of Private Bankers in East Asia have already increased by 30% to 80%, in some cases more than doubled, which leads to a lot of pressure from the cost basis of the wealth managers. MyPrivateBanking is advising Private Banks to leverage technology to facilitate and streamline the marketing process via the Internet and Social Media in order to control marketing costs.

In an interview with the leading Swiss paper NZZ our Research Director Steffen Binder presents (in German) the results of the latest MyPrivateBanking report “Wealth Management and Social Media.

Click here the see the full interview.

As we have just released our new report on Wealth Management and Social Media we would like to give another peak preview on its content. One of the objections we hear a lot  from private bankers against social media is that typical private banking clients are too old, too conservative and too busy to spend their time on Facebook & co. Well, we beg to differ. This is only a small piece from the report, summarizing our market research:

An important trend for wealth managers to appreciate is that affluent or wealthy individuals use the general platforms like Facebook or LinkedIn most frequently, visiting niche platforms only occasionally. In conclusion, our findings show that wealthy individuals who are active on the Internet typically use two or more platforms in parallel:

Broad-based social networks like Facebook are used to communicate with friends, relatives or neighbors but also to exchange opinions with strangers about a diverse range of topics.

Professional networks like LinkedIn or Xing, are visited in order to find and re-connect to former co-workers, to expand one’s professional network and to identify potential new business partners.

Micro-blogging-networks like Twitter help users to stay informed and to read the comments of specific people on recent news topics in real-time - but also to comment themselves extensively on all matters of personal or professional interest.

Niche-networks are used to communicate with other people who have the same, very specific interests (such as certain hobbies or sharing the same challenges or life situations.

…the majority probably thinks Facebook is for their sons and daughters to chat with their highschool buddies. WRONG! Read all about it.