A Business Model Map in the Wealth Management Industry

26 Pages Posted: 13 Sep 2011

Date Written: September 13, 2011

Abstract

This paper proposes a theoretical framework which sets alternative business models (BMs) in the wealth management industry, testing them with experimental data. Our “map” of business models arises when wealth managers (WMs) potentially make a mix of business process standardization/customization, together with ‘make or buy choices’, after an external and internal strategic analysis has been carried out. As far as the demand-side is concerned, the size of wealth under management is integrated with a new criterion to cluster customers, which also considers the client’s risk propensity and his/her willingness to diversify investments. In addition, internal conditions in the WM organization are adequately considered. Demand and supply operational information, referring to a unique dataset of Italian WMs covering more than the 88% of the national industry, allows us to test the reliability of the theoretical layout and to show the positioning of a relevant sample of Italian WMs. Operational data support that our business models map can be a reliable instrument both to describe and to guide the strategic position of WMs. The three theoretical BMs corresponding to “direct” customization may unambiguously be undertaken by three different clusters of Italian WMs. Figures of the residual two WMs’ clusters reveal their potential positioning which could be developed towards both direct customization and modularization.

Keywords: business model, wealth management, value-chain, High Net Worth Individuals

JEL Classification: D46, G21, G23

Suggested Citation

Lucarelli, Caterina and Maggi, Simona, A Business Model Map in the Wealth Management Industry (September 13, 2011). Available at SSRN: https://ssrn.com/abstract=1926867 or http://dx.doi.org/10.2139/ssrn.1926867

Caterina Lucarelli (Contact Author)

Università Politecnica delle Marche ( email )

Piazzale Martelli 8
Ancona, 18039
Italy
0039.071.2207196 (Phone)
0039.071.2207253 (Fax)

Simona Maggi

AIPB ( email )

Via Boccaccio, 7
Milan, 20123
Italy

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