Being a millionaire is not what it was, according to a recent study undertaken by the British bank Coutts and Co. To be really comfortable in 2005 you need at least 3 million - or its equivalent in dollars, euros or Swiss francs - to your name.
Fortunately for the wealth management industry, increasing numbers of such individuals exist, thanks to booming property values, recovering equity markets and a growing and increasingly diverse fixed income industry.
The latest Merrill Lynch/Cap Gemini World Wealth Report suggested total global private wealth increased last year to $28.8 trillion against $27.2 trillion at the end of 2003. Tantalisingly for wealth managers, only $5-$6 trillion of this is actively managed.
Not surprisingly, many banks - including names such as UBS and Morgan Stanley - are making more money from their private banking activities than from investment banking. UBS this year, for example, saw its best third quarter in four years partly on the back of high net worth individuals pumping in nearly $24 billion.
Globally the industry remains diverse, ranging from bulge bracket names down to tiny operations in Zürich and Liechtenstein, but the trend is towards consolidation.
Bob Diamond, president of Barclays, Britain's biggest wealth manager, recently announced the bank was seeking to expand through acquisition, reinforcing its retail presence in core markets such as France and Italy and making Barclays "pan-European and more." Such strategies may not prove easy. Tax amnesties in Italy and Germany have helped move wealth management onshore and prompted banks to prioritise domestic clients.
Harry Pilkington of Armstrong International says those domestic strategies are reinforcing a trend. "Over the long term, you won't see JP Morgan and Citibank being that successful outside the US, or, say, Deutsche Bank outside Germany," Pilkington says. "In most markets, indigenous banks are doing as well if not better, with the wealthy favouring the constancy of personnel and the more personal service."
Indeed, those close to the industry suggest private bankers must work hard to get and keep business, with Ted Wilson of the Scorpio Partnership, a London-based consultancy, saying the old image of a private banker - as a well-spoken but clueless British toff or a well-bred and secretive "gnome of Zürich" - no longer holds.
"The calibre of individuals is increasingly high and it has to be, given the growing sophistication of investment products and the increased liability arising out of putting someone into the wrong investment," Wilson says.
Tony Riotto of the New York-based search firm Riotto-Jones Company agrees. "The role of the private banker has changed with large institutions in particular looking for individuals able to understand the sophisticated needs of clients and in a position to call upon others who can help with solutions," he says, suggesting a full PDA of contacts also boosts earnings.
Increasingly, banks are looking not just for individuals with a good track record of "creative" wealth management but with that little bit extra. Pilkington says product specialists - in such areas as equity derivatives - get paid more than their colleagues, as do people who bring in fresh business rather than relying on an existing client base.
"The people who've made the most money are those who sat down with an empty contact book ten years ago and now have a full client list," he says.