Tycoons shunning financial services as they get richer

Thu Jan 17, 2013 8:10am EST
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* Surge in proceeds for shareholders selling company stakes

* Rise in assets at wealth managers and banks more muted

* Tycoons favour property, new business ventures

By Chris Vellacott

LONDON, Jan 17 (Reuters) - Tycoons are shunning banks and wealth managers, preferring to put a flood of money from selling stakes in companies into property and new ventures rather than trust industries whose reputations have been battered by the global financial crisis.

Thomson Reuters data show that proceeds for shareholders selling stakes in companies, excluding governments, have tripled since 2008 to $183 billion last year, creating new millionaires and making many wealthy people much richer.

But little of that cash appears to have made its way to the wealth management industry, which specialises in looking after - and increasing - the riches of the world's multi-millionaires.

The average increase in assets run for clients by wealth managers and banks was 6.55 percent for the 100 largest institutions in the sector, according to the most recent analysis by finance industry consultants Scorpio Partnership which based its research on published company earnings for 2011.

"Forgetting all the other ways of getting new money (for banks and wealth management firms), there is a deficit there," said Cath Tillotson, managing partner at Scorpio.   Continued...