Publicly-listed wealth management companies are facing their share of challenges as they move into 2009, according to a recent analyst report.
The report, compiled by Merrill Lynch, suggested that while there is certainly value in some wealth managers, this is being offset by a continuing deterioration in consumer sentiment.
“Consumer sentiment is deteriorating, flows haven’t been as bad in decades and what money is flowing into the system we suspect is going into cash,” the analysis said.
It said with equity markets down another 21 per cent since September 30, the December quarter was looking to be problematic for wealth managers.
“Earnings per share (EPS) downside is likely and with recovery some way off, there seems no need to chase these names,” it said.
