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Report
Deutsche Asset
& Wealth Management
Deutsche Asset & Wealth Management
Next Generation –
In the context of international Wealth Management
Tradition meets Modernity
David Kroell, International Family Office Services
Tel Aviv 10th June, 2014
Deutsche Asset & Wealth Management
Deutsche Bank’s History of Family Office Services
1988
Foundation
of Wilhelm von
Finck AG in
Munich by
Wilhelm von Finck
sen. and Wilhelm
von Finck jun.
1990
1999
2005
Foundation of
Oppenheim
Vermögenstreuhand GmbH
in Cologne by
former partners of
Sal. Oppenheim
Foundation of
Deutsche Family
Office GmbH in
Frankfurt am Main
by Deutsche Bank
Acquisition of
Wilhelm von Finck
AG by Deutsche
Bank
Deutsche Bank
5 Strategic Pillars
Private &
Business
Clients
Corporate
Banking &
Securities
Deutsche Asset
& Wealth Management
Deutsche
Global
Asset &
Transaction
Wealth
Banking
Management
Non-Core
Operations
2011
2013
Creation of Wilhelm
Creation of
von Finck Deutsche
Deutsche
Family Office AG by
Oppenheim
merger of Wilhelm
Family Office AG
von Finck AG and
by merger of
Deutsche Family
Wilhelm von Finck
Office GmbH
Deutsche Family
Office AG and
Oppenheim
Vermögenstreuhand
GmbH
Going international:
creation of
International
Family Office
Services (IFOS)
2
International Family Office Services
A Full Range of Solutions – Next Generation
Wealth
Advisory
Mandate
Alternative
Investments
Equities
Advisory
Fixed Income
Discretionary Portfolio
Mgmt
Mutual Funds
Asset Allocation/
Risk Mgmt.
Client’s
personal
situation
and
objectives
Structured
Products
Tailored
investment
strategy
FX &
Commodities
Client
Deposits &
Cash Mgmt
Estate
Planning
Fiduciary
Solutions
Monitoring
and review
Next
Generation
Wealth Planning
Loans and Credit
Solutions
Key Clients
Services
Note: The services described are provided by Deutsche Bank AG or by its subsidiaries and/or affiliates in accordance with appropriate local legislation and regulation.
Certain products and services may not be available in all locations or to all Deutsche Bank Wealth Management clients.
Deutsche Asset
& Wealth Management
3
Prediction 2030
What can be expected?
Forecast
Inherited Assets from 2011 until 2020 (Germany)
in bn. Euro
1000
 The volume of inheritances worldwide is constantly rising a trend that will continue
800
 Substantial amounts of money in the coming years will be
inherited to the next generation
innerhalb
Erbschaft
Inheritance
600
einer
Generation
within
a
Generation
Erbschaft
zwischen
Generationen
Inheritance over
Generations
400
200
 While the transfer of assets from the older generation to the Baby
Boomers takes place, in the coming years a gigantic wave of
private assets will be inherited to the younger generations
(NextGen)
 These younger generations are referred to as Generation X and Y
0
Bankable
Assets
Geldvermögen
Real
Estate
Immobilien
 The estimates are € 2.6 trillion by 2020 for Germany and USD 30
trillion by 2040 for the USA
Tangible Assets
Sachvermögen
Cp. Deutsches Institut für Altersvorsorge: Erben in Deutschland, Köln 2011
Wealth Managers can position themselves in an attractive market and benefit if they combine their traditional values ​with new
customer requirements
Changing Customer Needs
 New preference structure and
behavioral patterns of customers
 Risk to not adequately address
customers
1
Existing customer relationships
endangered
Twofold Challenge:
 Retain loyalty of existing customers
 Continue development of an attractive
value proposition for NextGen
Accelerated loss of Assets
 On average 70% of private banking
customers are over 50 years.2
 In 40% of the cases, the next generation
of the current customer is not known
Cp. Accenture, The “Greater“ Wealth Transfer Capitalizing on the Intergenerational Shift in Wealth, 2012
Cocca, T.D., External Assets Managers, Studie Zürich, 2011, unveröffentlicht
2 Cp.
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& Wealth Management
4
Who exactly is the Next Generation (“NextGen”)?
Characteristics

As term for the future client-generation in private banking the so-called Generation X can be used

In addition, Generation Y is included to account for possible additional scenarios
Generation X (30 – 45 years)
Life Style
Financial
Eductaion
Consumer
behaviour
1
Generation Y (15 – 30 years)

Individualistic and independent

Independent and autonomous

“Work-Life-balance” is important

Self-representation is important

Self-determination is important


Conservative and prudent handling of money
Growing need to be accepted by comrades and
network with them

Better education than Baby-Boomers

Willingness and eager to learn new things

General financial knowledge


Critical attitude towards banks
Merging the boundaries between education and
entertainment

Strongly affected by the 2007 financial crisis

Advice from friends and relatives has a higher value
than an expert consultation1

Low loyalty towards brands

Producers, distributors and consumers of content

Pronounced affinity for new technologies

Recommended products are preferred

Multi-bank relationships and frequent change of
bank

Higher reliance on information from neew media

Insignificant customer retention force to bank
brands
Vgl. Williams K.C./Page , R.A.; Marketing to the Generations, Journal of Behavioral Studies in Business, Volume 3, April 2011, S.9
Deutsche Asset
& Wealth Management
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Facts and Figures …..
….. to the use of social media by NextGen customers
1
52% of Twitter- and Facebook users are over 35 years old. The use in the age class 50-56 years has gone from 9% to 20% in
the last 3 years
2
70% of the millionaires in the USA use Social Media
3
On average a wealthy person in the USA is member of 2,8 Social Networks with an average of 110 contacts
4
47% of the UHNW individuals in Europe use Facebook
5
Already today 20% of the age class 60 -69 years can not imagine their life without Social Networks
6
More than 50% of the UHNW individuals in Europe recognize Social Media as most important channel of communication
with their bank.
Deutsche Asset
& Wealth Management
6
Change is nothing new to Wealth Management…..
….. but it’s coming faster and with more fury
“Banking is essential. Banks are not.”
Bill Gates
Deutsche Asset
& Wealth Management
7
Requirements for Next Gen Wealth Management (1/2)
10 Imperatives
1
Interact virtually!
2
Give me power!
3
Give me a sense!
4
Network me!
5
Emotionalise me!
Deutsche Asset
& Wealth Management
Requirements for Next Gen Wealth Management (2/2)
10 Imperatives
6
Respect me!
7
Inspire me!
8
Open yourself up!
9
Convince yourself!
10
Re-invent yourself!
Deutsche Asset
& Wealth Management
Structure of the future Wealth-Management industry
Possible scenarios for 2030
Potential for change for Wealth Mangers
I-Bank
Szenario 2
Evolution of the established Banks
Szenario 3
Apple / Facebook-Bank (iWealth)
Potential of occurence of the relevant Scenario
Szenario 1
Szenario 4
It‘s all an Illusion
Cp. Cocca, T.D., Private Banking 2030, März 2014 , S. 16-18
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& Wealth Management
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What is “DB Next Generation”?
—
We anticipate the changed trends and needs of the upcoming entrepreneurial generation
—
We provide inspiring ideas and agile strategies for long-term partnerships
—
“Connecting and empowering the entrepreneurs of tomorrow in today’s world of finance”
As their global partner, we encourage and accompany the interdisciplinary and
intercultural dialogue within this exclusive target group of tomorrow’s key
clients and get in constant touch with them at an early stage of their lifecycle.
Deutsche Asset
& Wealth Management
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International Family Office Next Generation
Our gateway for Next Generation clients
Under our initiative “Next Generation SUCCESSION”, Deutsche Asset & Wealth
Management is offering a universe of dedicated educational programs bringing together:
founders, representatives and heirs of the most influential entrepreneurial families as well as young
successful entrepreneurs from all over the world.
Next Generation SUCCESS I O N
I nformation
Expertise
O rientation
Education / Knowledge Transfer
N etwork
Global Network
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& Wealth Management
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Important Information
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Management, through Deutsche Bank AG, its affiliated companies and its officers and employees (collectively “Deutsche Bank”) are communicating this document in good faith
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