Amid softening demand for structured financial products among retail investors last year, HSBC, JP Morgan and Barclays maintained their positions as top providers of structured products to retail buyers in the US, and Barclays emerged as the clear leader in Europe, according to Greenwich Associates.
“Uncertainty about a volatile economy and historically low interest rates limited demand for structured products among clients of third-party distributors in the US and kept overall product volume flat in Europe from 2011 to 2012,” says Greenwich Associates consultant Andrew Awad.
While Barclays emerged as the clear market penetration leader in European retail structured products, penetration gains over the past year have moved UBS and J.P. Morgan into a statistical tie with BNP Paribas, Société Générale and The Royal Bank of Scotland for the number-two spot. Barclays also earned the title of 2012 Greenwich Quality Leader in European retail structured products.
“Due to the lack of volume growth in the past year, gains in market position achieved by individual banks over the past year generally came directly at the expense of other competitors,” says Awad.
Private banks represent by far the biggest channel for retail structured product sales in the US. In terms of the volume of structured products sold into the retail market, private banks surpass other third-party distributors by three to four times. However, for the past several years third-party distributors had been increasing structured product volumes. That growth in the third-party market sputtered from 2011 to 2012.
HSBC maintained its dominant position as the leading provider of structured products to U.S. retail clients with a market penetration score of 71 per cent, followed by J.P. Morgan, Barclays, Morgan Stanley, Wells Fargo, and Goldman Sachs. These firms are the 2012 Greenwich Share Leaders in US Retail Structured Products. HSBC also earned the designation of 2012 Greenwich Quality Leader in this market.
Firms cited as Greenwich Quality Leaders have distinguished themselves from their competitors by earning service quality ratings that exceed those of competitors by a statistically significant margin.