Assets under management are up, but profits are down. These are difficult times for private banks that serve the world’s richest individuals. The cost of chasing business from high net worth (HNW) individuals is rising as they grow more cautious about entrusting their assets to private bankers.

According to the Scorpio Partnership, a wealth management consultancy, private banks managed US$16.5trn in HNW assets last year, up 17% on the year before. However, the net new money that well-heeled customers pledged to banks in 2009, only US$900m, was down a steep 60% from the previous year. Moreover, around US$10trn in “bankable” assets remain outside of banks.  Despite improved investment performance, clients remain skittish about investing their money, even if they have a lot of it.

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