The wealth management market - Spain (2024)

1.2 The global market

In ****, the global wealth management market is estimated to be worth $*** billion , according to Bain & Company. Between **** and ****, the market is expected to grow at a CAGR of *.*% to reach $*** billion, doubling in value according to Bain.

Moreover, despite heavier regulation, volume is increasing, andthe number of high net worth (***) customers is on the rise. This group of consumers makes up the vast majority of customers and revenue streams. Below is an overview of the evolution and distribution of HNWIs worldwide, where the expected increase in wealth is apparent; in all three scenarios, the wealth of HNWIs worldwide is increasing. The Bear scenario refers to markets in sustained and/or significant decline. conversely, the Bull scenario refers to markets experiencing sustained and/or significant growth. Between the two lies the Base scenario, defining a stable market. Evolution of HNWI assets by scenario World, **** - ****, in $ trillions Source: ****

on a global scale, wealth managers' revenues are mainly concentrated in North America, with almost $*** billion in revenues in ****. This figure is expected to rise to $***.* billion (***), opening up strong growth prospects for the wealth management market.

Wealth managers' revenues from HNWI by region World, **** - ****, in $ trillions Source: ****

Assets under management are growing ...

1.3 The domestic market

Many players are involved in managing the wealth of private individuals (***), in particular by placing their investments on the financial markets. This study will focus on the "Empresas de Asesoramiento Financieros" - EAF - whose mission is to propose investment plans to their clients in a neutral manner, as well as advising them on the management of their assets.

Between **** and ****, there were significant variations in the wealth advised by EAFs in Spain. In ****, it stood at **.*** million euros, but fell by -**.**% in **** to **.*** million euros. In ****, the decline continued with a decrease of -**.**%, bringing the total to **.*** million euros. However, in ****, a recovery of +**.**% brought the total to **.*** million euros. In ****, advised assets fell slightly by -*.**% to **.*** million euros.

Evolution of EAF sales Spain, ****-****, billions of euros Source: ****

Nevertheless, over the period, we can see that sales have declined much less proportionately than insured assets. Indeed, while in **** insured assets stood at **.*** million euros, they reached **.*** million euros. in ****. It thus fell by -*.**% between **** and ****, to **.*** million euros. In ****, a more marked decline of -**.**% was recorded, taking sales to **.*** million euros. However, in ****, sales rebounded with an increase of +**.**%, reaching **.*** million euros. before reaching ...

1.4 Spanish heritage

In ****, total wealth in Spain was estimated at ***.* billion euros, with mobile capital predominating, accounting for **% of total wealth, or around ***.* billion euros. Immutable assets, such as real estate, accounted for **.**% of the total, or around *** billion euros. Insurance and annuities accounted for *.**%, equivalent to around **.* billion euros, while assets allocated to the global economy (***) represented *.**%, or around ** billion euros. Luxury goods remained marginal at just *.**% of the total, or around *.* billion euros, and other goods and securities, including various financial investments, accounted for *.**%, or around **.* billion euros.

Breakdown of total assets in Spain Spain, ****, % of total assets Source: ****

Moving capital:

In ****, the distribution of mobile capital in Spain revealed a clear preference for shares and holdings in non-traded legal entities, which accounted for **.**% of the total. Next came collective investments, with **.**%, followed by account deposits, which accounted for **.**%. Shares and holdings in traded legal entities accounted for *.**% of mobile capital. Public debt, treasury bills and bonds accounted for just *.**% of the total. These figures illustrate a strong orientation towards investments in unlisted entities, reflecting a search for stability in the composition of financial assets in Spain.

Breakdown of mobile capital in Spain by type Spain, ****, %, %, %, %, %, %, %, %, %, %, %, % Source: ****

2.1 Typology of Spanish customers and assets

Distribution of average net wealth by age Spain, ****-**** comparison, thousands of euros Source: ****

In Spain in ****, the over-** age group stands out as the wealthiest, with an average net wealth per household of ***.* thousand euros per year, closely followed by the **-** age group, with ***.* thousand euros per year. These figures reflect a lifelong accumulation of wealth, with a notable concentration among the elderly.

Between **** and ****, the distribution of average net wealth per household in Spain showed notable evolutions according to age bracket. For the under-**s, average net wealth rose slightly, from **.* thousand euros annually in **** to **.* thousand euros in **** (***).

In contrast, for the **-** age group, average net wealth has fallen, from ***.* thousand euros annually in **** to ***.* thousand euros in **** (***).

For **-** year-olds, the trend is upwards, with average net wealth rising from ***.* thousand euros annually in **** to ***.* thousand euros in **** (***). These variations underline different dynamics by age, with marked increases among the youngest and oldest, while the intermediate generations experienced declines in their average net wealth.

Investor profile:

In ****, **.*% of Spaniards said they saved every month. Among them, young people aged **-** stood out as the most assiduous savers, with **.*% of this age group putting money aside ...

2.2 The real wealth of Spaniards

In ****, the distribution of real assets by age in Spain revealed some significant trends. Ownership of a main home seems to increase steadily with age, rising from **.*% among the under-**s to **% among the over-**s. Other real estate ownership follows a similar trend, rising from **.*% in the under-**s to a peak of **.*% in the **-**s, before dropping slightly to **.*% in the over-**s.

Self-employed business is mainly held by **-** year-olds (***), but its prevalence decreases sharply with age, reaching only *.*% among the over-**s. Art ownership remains relatively stable across age groups, peaking in the over-**s at **.*%. Finally, ownership of any type of real asset shows a strong progression with age, rising from **.*% in the under-**s to **.*% in the **-**s and over-**s, indicating a progressive and diversified accumulation of real assets throughout life.

Percentage of population with real assets by type and age Spain, ****, % (***) Source: ****

In Spain in ****,households aged ** to ** generally had the highest median asset values. This age group stands out in particular for the median value of their main property, which remains stable at around *** thousand euros, and for their other real estate holdings, reaching up to ***.* thousand euros for **-** ...

2.3 Spaniards' financial wealth

In ****, the vast majority of Spaniards owned at least one financial asset, with **.*% of the population holding a financial asset in general. Current and savings accounts were the most common, held by **.*% of Spaniards. By contrast, other types of financial assets were much less common. Pension funds and life insurance were owned by **.*% of the population, while only **.*% held non-usable accounts linked to housing. Stock market-listed shares were held by **.*% of Spaniards, and investment funds by *.*%. Fixed annuities and unlisted shares were the least common, held by *.*% and *.*% of the population respectively. Finally, **.*% of Spaniards owned other types of financial assets, underlining the limited diversification of portfolios beyond the most traditional forms of savings.

Share of Spaniards with financial assets Spain, ****, % (***) Source: ****

Wealth distribution by income percentile :

In ****, the distribution of Spaniards' financial assets varied significantly according to income percentile. For the poorest **%, **.*% of their financial wealth was made up of current accounts and savings, reflecting a strong dependence on these forms of liquid assets. as income rises, this proportion falls: for households between the **th and **th percentiles, current accounts accounted for **.*% of their wealth, and this share dropped to **.*% for those between the **th and **th percentiles.

By contrast, ...

2.4 The financial wealth of the richest

Between **** and ****, data on net wealth in Spain highlights that the richest **% of the population, belonging to the **th to ***th percentile, represent a key target for wealth management advisors. In ****, these households held an average of *,***.* thousand euros in net wealth, significantly more than other income brackets. This concentration of wealth makes this population category a prime target for wealth management professionals.

Households in this income bracket have specific and complex needs, requiring specialized advice to manage their wealth effectively. This includes tax planning, investment diversification, risk management and estate planning. Given the size of their wealth, these households are particularly likely to seek the services of a wealth management advisor to optimize and protect their assets.

Thus, the wealthiest **% are a major potential client group for wealth management advisors, as they have the resources and needs that justify expert, personalized wealth management.

Comparison of Spanish net wealth by income percentile Spain, ****-**** comparison, thousands of euros Source: ****

Between **** and ****, the distribution of net wealth in Spain shows that households with the highest incomes continue to hold a significant share of total wealth, although this share has decreased slightly over time. In ****, the richest *% of households held **.*% of total net ...

3.1 Overview of the competitive landscape

In Spain, wealth management involves a variety of specialized players who intervene to help individuals and families manage, protect and grow their assets. Here are the main players involved in wealth management in Spain:

Private banks

Role: Offer wealth management services, including portfolio management, investment advice, tax planning and inheritance.

Examples: BBVA Banca Privada, Santander Private Banking, CaixaBank Wealth Management.

Asset management companies

Role: Manage investment funds, SICAVs (***) and other investment vehicles on behalf of their clients, often integrating customized wealth management strategies.

Examples include Bestinver, Renta * Banco, Mutuactivos.

Financial and wealth advisors

Role: Provide independent wealth management consulting services, including investment advice, financial planning and tax structuring. This category includes EAFs and family offices offering independent management of their clients' assets. Like stockbrokers and brokers, these companies cannot offer their own products to their clients, nor can they make investment decisions on their behalf. Nor can they be mandated by their customers to make decisions for them on the financial markets.

Examples of this are Tressis, Abante Asesores, Arcano Partners, Grupo Arcano (***), Altamar Capital Partners.

Brokerage firms and brokers

Role: Facilitate the purchase and sale of financial securities (***) and provide investment advice. Some brokerage firms also offer asset management services. ...

3.2 EAF structure

In ****, the average size of a Financial Advisory Firm (***) in Spain was characterized by average sales of ***,*** euros. Average profits were **,*** euros, while average equity investment was ***,*** euros. The average size of an EAF is therefore more in line with that of a small business, even if there are major disparities between the players.

Average EAF size in Spain Spain, ****, thousands of euros Source: ****

The table opposite shows the predominance of the largest companies in the market. The top ** companies account for over **% of market share in this activity.

Source: ****

The table below shows the most profitable EAFs in ****:

Source: ****

A geographically concentrated market:

The map below shows the distribution of EAFs in Spain. These companies are concentrated in the capital, Madrid.

In ****, the Community of Madrid accounted for **.**% of all FAE, followed by Catalonia with **.**%. The Valencian Community, the Basque Country and Galicia had similar shares, ranging from *.*% to *.**%. Finally, the rest of the country accounted for **.**% of EAFs. In addition to Madrid, these companies are mainly located in the other * Autonomous Communities.

Distribution in % of EAF in Spain Spain, ****, % of total Source: ****

3.3 The largest wealth management funds in 2022

The table opposite shows the largest asset management funds present on the Spanish market in ****. It covers every possible category of player on the market. These funds are dominated by banks:

Source: ****

4.1 Offer typology

Specialist wealth management companies in Spain offer a range of services designed to manage and optimize the financial and real estate assets of wealthy individuals or families. These services are designed to achieve long-term financial goals while minimizing risk. The main services offered are

financial goal setting: helps define realistic and specific financial objectives, such as wealth accumulation, retirement preparation, or wealth transfer.

Examples include Planning for real estate acquisition, financing children's education, or maintaining standard of living after retirement.

Investment strategy: development and implementation of investment strategies tailored to the client's risk profile to optimize long-term returns.

Examples: Investment in equities, bonds, investment funds, or derivatives according to objectives and risk tolerance.

Use of suitable financial instruments: selection of the most appropriate financial instruments to maximize returns while diversifying risk.

Examples include Equities, bonds, mutual funds, ETFs, derivatives, etc.

Tax planning: tax optimization of investments and assets, to minimize taxes and maximize net wealth.

Examples include Use of tax advantages linked to investments, structuring inheritance to reduce inheritance tax, etc.

wealth protection and transfer: implementing strategies to protect wealth from risk and planning its transmission to future generations.

Examples include Creation of trusts, life insurance, estate planning.

ongoing monitoring and ...

4.2 An increasingly digital offering

The integration of technology into wealth management has dramatically transformed the sector, with major impacts on the way financial advisors work and interact with their clients.

Big Data and Artificial Intelligence (***): The growing use of Big Data and AI is enabling financial advisors to offer more personalized solutions tailored to customers' needs. AI makes it possible to simulate different macroeconomic, geopolitical and financial scenarios, analyzing hundreds of risk factors. This enables more robust and optimized portfolio construction, tailored to individual client objectives. Some **% of advisors believe that AI helps them improve their analysis and adapt investment strategies more quickly.

Simplification of tasks thanks to technology: technological advances, particularly in IT and automation, have simplified the management of administrative tasks, enabling advisors to devote more time to finding optimal investment solutions for their clients. The availability of digital data encourages more accurate, transparent and up-to-date assessment of investment opportunities.

Continuous training challenge: For wealth management advisors, one of the major challenges is to continuously train on new technological tools, including those related to AI. Almost **% of advisors express the need for specific training in the use of these technologies to remain competitive in a constantly evolving market.

Impact of MiFID III: The ...

4.3 Ongoing integration of ESG criteria into our offering

The importance of ESG (***) criteria in finance is closely linked to growing consumer demand for sustainable financial products. Indeed, a **** study by the OECD shows that **% of consumers have shifted their purchasing choices to more sustainable options, and this trend is also reflected in financial services. Sustainable financial products, such as investments, banking and insurance products, enable consumers to align their investments with their social and environmental values.

Younger investors are showing increased interest in sustainable financial products, motivated by opportunities for better returns or the desire to avoid the financial risks associated with products that do not take ESG risks into account. For example, around **% of Europeans believe it is important that their savings do not finance economic activities that have a negative impact on the planet, and almost half are more inclined to invest in financial products if they know they are sustainable.

What's more, consumers are increasingly aware of the role of finance in mitigating climate crises and social challenges. For example, in New Zealand, **% of investors prefer their money to be invested ethically, although few have yet taken concrete action. In Italy, **% of investors say they are interested in sustainable investment, particularly among women and the better ...

5.1 Legislation

Real Decreto ****/****, de ** de diciembre, amended the legislation governing EAFs. The points below correspond to the main changes brought about by this law:

New category of EAFN: A new category of "national financial advisor" (***) is introduced, to which natural person EAFs must convert on a mandatory basis. Legal entities may also choose to convert to this category.

Increased capital requirements: EAFNs must now have a minimum capital of **,*** euros (***), which can no longer be replaced by a simple civil liability insurance policy.

Solvency and FOGAIN membership: EAFs must now meet solvency requirements and join the Fonds de Garantie des Investissements (***). This also applies to EAFNs.

Loss of the European passport for EAFNs: EAFNs will not be investment services firms (***) and will therefore not benefit from the European passport to operate in other EU jurisdictions.

Regulation of agents: EAFN agents will continue to be restricted to the promotion and marketing of authorized services, while EAF agents will have the option of broadening their scope to include advisory services.

Prohibition on receiving benefits: Prior to the **** Act, AFEs could receive benefits from certain companies offering financial investments if they succeeded in placing these investments in their clients' portfolios. This is no longer possible, ...

6.1 Segmentation

• BBVA
• Caixabank
• Santander
• Banco Sabadell
• IBERCAJA
• AFI Inversiones Financieras Globales
• Finaccess Value AV S A
• Sinergia Advisors 2006 AV
• BISSAN