It seems every financial services provider claims it is aiming at the high-net-worth market. But according to a study by The Boston Consulting Group (BCG), many firms risk missing the target.

The study looked at the market of an estimated 34 million households worldwide with net investment assets in excess of $250,000, controlling $40 trillion in wealth overall.

According to Bruce Holley, a BCG vice president and co-author of the study, financial firms “let their costs grow rapidly during the 10-year bull market and don’t have a clear picture of their own economics--particularly of their cost to serve customers. As a result, many are targeting the wrong customers, focusing on those with either too much or too little wealth to match their current business models.”

BCG says its study found that one-third to one-half of client accounts at what it calls wealth-management firms hold balances below the stated minimum size.

“The key to profitability for wealth managers may lie in deciding which customer segment--a specific wealth level or geographic region--they can most effectively serve,” the study says.

Citigroup and Schwab got positive comments.

Citigroup offers a full spectrum for private bank customers (through Citigroup), investment products (through Salomon Smith Barney) and insurance (through Travelers).

Schwab’s Signature service for more affluent customers, as well as its acquisition of US Trust, which caters to higher-end clients, is also the right approach, according to the BCG.

For more information on the study, “Richer Prospects in Wealth Management: Global Wealth 2001, A Senior Management Perspective,” go to:

Editor's note: For any comments regarding this article, or to suggest a story idea for RR Online or Registered Representative magazine, contact Editor in Chief Dan Jamieson at, Online Editor Rick Weinberg at, Online Managing Editor Cheryl Cooper at or Senior Editor Michael Hayes at