HSBC (HSBA.L) has set an ambitious goal to double the assets under management (AUM) in its British wealth division to £100 billion ($131 billion) within the next five years. This initiative aligns the bank with competitors seeking to capture more fee income from the UK’s ‘mass affluent’ market, according to José Carvalho, Head of Wealth and Personal Banking UK at HSBC.
The bank aims to establish itself as a top-five player in Britain by leveraging its international reach to attract clients who bank with HSBC across multiple markets or have international ties. “International connectivity is our competitive advantage and is driving growth,” Carvalho told Reuters. Globally, HSBC’s asset management business is valued at $712 billion.
To support this expansion, HSBC plans to increase its advisory workforce, although specific numbers were not disclosed. The move positions HSBC to challenge leaders in the UK’s wealth management market, such as St James’s Place, which reported £168 billion in AUM at the end of last year.
Britain’s wealth management sector has seen significant growth, with the largest UK banks generating $12 billion from wealth management in 2023, an 11% year-on-year increase. Rivals Barclays (BARC.L) and Lloyds (LLOY.L) have also announced strategies to tap into the mass affluent market—defined by Lloyds as customers with deposit balances between £75,000 and £250,000—which collectively represents around £4 trillion, or half of Britain’s wealth market.
HSBC’s strategy involves cross-selling more products to wealth clients through enhanced digital banking channels, while also encouraging long-term investment strategies among its affluent customers. This approach mirrors broader industry trends, with banks like Lloyds and Barclays pursuing similar strategies to integrate digital tools and advisory services.
However, industry experts caution that the competition in this market is fierce. “The demand for wealth management services continues to grow, but competition is high as almost every major bank has now declared its ambition to take a bigger slice of the pie,” said Nigel Moden, EMEIA Banking & Capital Markets Leader at EY. Christian Edelmann, Managing Partner for Europe at Oliver Wyman, added that the collective ambitions of banks might exceed what the market can deliver, suggesting potential disappointments ahead.
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