Top-notch Investment Advice in Germany's Private Banking Sector
Year after year, wealthy German clients are seeking the best advice on investments for their substantial assets. In 2023, ntv and Focus Money put the top addresses for refined private client services through their paces once again, offering an extensive quality check—a tradition now in its 17th year! The outcome was unmistakable; German providers of private banking and asset management continue to excel in the delivery of high-quality advisory services.
Astonishingly, 32 of the tested 40 banks and asset management companies shone with their remarkable advisory services, earning the title of "Outstanding Asset Management."
The Quest for Quality
This time around, the Institut für Vermögensaufbau (IVA) scrutinized the market leaders in the major German metropolitan regions, focusing on Berlin, Frankfurt am Main, Hamburg, Cologne/Bonn/Düsseldorf, and Munich. Moreover, the IVA awarded "wild cards" to selected asset managers from areas outside these major cities, including Hanover, Münster, and Karlsruhe.
The IVA assigned four distinct individuals as test subjects, who sought consultations in the period from June to July 2023, aiming for long-term investments worth €1,100,000, primarily in shares. Generally, this required two instances of consultations.
Diversifying Asset Allocations
In evaluating the various competing asset managers, the IVA found that significant differences remained among their focus areas in 2023. The asset classes "equities" and "liquidity" emerged as the only common denominator across all investment proposals. Bonds were included in slightly fewer proposals than in the past, despite an interest rate turnaround taking place.
Real estate, derivatives, and commodities remained unpopular among the majority of asset managers, as they previously. However, in 2023, nearly half of all providers excluded commodities from their investment proposals. The considerable disparities were most noticeable in equity and liquidity allocations.
In terms of equity funds, asset managers allotted a substantial 40% on average to individual stocks. North America, in particular, continued to be a compelling region, although the eurozone gained in significance.
The emphases on technology and healthcare companies remained consistent, while the utilization of active funds surpassed passive index tracking in 2023—with ten ETFs leading the index in investment portfolio weights.
Interestingly, virtually all asset managers favored equities over bonds, and short-term bonds were the preferred option. Lastly, the investment in precious metals varied significantly among providers.
The Evaluation
The IVA based its analysis on diverse aspects, such as portfolio structure, client focus, transparency, and cost-effectiveness. In this manner, the providers earned points in each of these categories. The final score was an average of all sub-categories, computed in accordance with predefined weightings.
Insights and Implications
A detailed scrutiny of the leading asset managers in Germany uncovered the following trends and observations:
- Robust performance by Munich-based Institut für Vermögensaufbau (IVA): Once again, the IVA proved to be a dominant force in the German private banking sector, clinching the title of "Outstanding Asset Management."
- An emphasis on equity funds: In the search for investment advice, wealthy German investors might consider firms primarily focusing on equity funds, since these figured prominently in all investment proposals in 2023.
- Emerging markets' growing potential: Some asset managers have been demonstrating interest in emerging markets, with China and Asia gaining momentum as attractive regions for long-term capital growth.
- Rising focus on index funds and ETFs: For diversified financial investments, there has been an increasing interest in index funds and ETFs, accounting for over 40% of the average product allocation in 2023.
- Active fund management surpasses index tracking: Contrary to the previous year, the emphasis on active fund management surpassed passive index tracking, with ten ETFs claiming the highest weights in investment portfolios.
- Persisting popularity of bonds: Bonds remain a popular investment choice among asset managers, with 75% of investment proposals featuring bonds according to the IVA.
- Varying interest in commodities, particularly gold: Investment in commodities, such as gold, has seen varying interest among asset managers. While some have allocated up to 11% to precious metals, others completely abstained from the use of both ETFs and passive funds containing gold.
Unveiling the Top Asset Managers in Germany
To discover the specific rankings of top asset managers in Germany from ntv and Focus Money's annual quality check in 2023, you would need to refer to their detailed reports or publications from that year. These rankings are typically determined based on factors such as investment performance, client services, fees, and overall industry reputation. A comprehensive analysis of these reports would provide the nitty-gritty of the top-performing asset managers in Germany, aiding informed investment decisions for wealthy clients.
