Banking as a broadly defined industry these days isn’t much fun, as isn’t being a small(ish) European country that just recently got over the success of “300” and Sparta and now is back in the unwanted non-Olympic limelight.

On the contrary, the investment management business globally according to proprietary Strategic Insight research surpassed $100 trillion in assets under management last year, and – for some – is actually a lot of fun. Footnote: these total AUM figures might actually be on the conservative side despite being adjusted for double counting.

Who is leading the pack? Wealth management and mutual funds.

The mutual fund industry with $27 trillion of total AUM is leading the way as an investment vehicle, but of course the big prize is wealth management/HNW investors, which approach $40 trillion in total assets.

This has a number of important strategic implications.

1. Growth is primarily in Asia, for funds and wealth management:

HSBC’s head of private banking is moving to HK (shortly – always follow your chairman), as is JP Morgan’s international private banking chief (moving trucks stopped by this week). Brady Dougan, Credit Suisse CEO, yesterday announced Q4 results and stated that one quarter of 2009 private banking net flows came from Asia (we have commented numerous times on the metatrends “West to East” and a growing “Global Middle Class” as growth drivers for the region).

2. Battlegrounds Private Banking (and Switzerland), fun for some:

Recent proprietary Strategic Insight distribution research showed that most private banks see growth primarily outside of Switzerland and with new client segments, but still private banking and wealth management in Switzerland (for on- and offshore investors) remains a core segment of the market (see graph below).

Credit Suisse clearly had fun this week announcing its 2009 results – since it attracted CHF35 billion in net inflows, while its rival UBS lost CHF90 billion in net redemptions. Some analysts now forecast that Credit Suisse will surpass UBS as Switzerland’s biggest bank in 2010. Definitely not fun for Oswald Gruebel, who ran Credit Suisse before he took over UBS. Still, despite the losses UBS is doing well across Asia, given that most investors there don’t care much about the issues Europe and the US are dealing with.

A few years ago listening to Singapore being described as the “Switzerland of the East” only caused a few polite smirks in Zurich and Geneva, but the trifecta of issues around subprime, taxes (Italy et al), and bank secrecy have caused a big divide in the country. Clearly, Singapore’s SWFs launching offshore UCIT vehicles for Europe distribution and their declaration in Davos of a ‘once in a lifetime’ opportunity for Asia to grab global market share didn’t result in smiles in the Alps either.

3. Secular shifts in distribution in Europe (and the US) are a big opportunity for independent firms:

As part of our broad based professional fund buyer survey across Europe (and the US) the theme of independence stood out, both as in independent financial advisors being a growth opportunity for non-proprietary fund distribution as well as independent money management firms helping private banks and other distributors re-establish their respective tarnished brands with angry customers.

Switzerlands of course remains dominated by private banking (no surprise here), but even there we see slow changes. Of course, much depends on the mood of the country, e.g. the UK has seen $225 billion in net new flows over the last five years across asset classes (happy), while Italy on the other hand suffered from $235 billion in combined net redemptions (not so happy).

But even in Italy the banks are not willing to pro-actively kill the attractive mutual fund business and are opening their doors again slightly, while promotori finanziari used the crisis to grab market share and sustain and develop relationships with their more educated client base and to introduce independent fund firms to investors in a variety of packages (white labeling, separated accounts, funds and wraps).

4. An owl? Transparency and safety looking for a suitable partner:

Lastly, investors collectively now hold $60 trillion in various forms of cash effectively earning zero, Europe with $14 trillion leading the way. Getting investors (retail of HNW) to shift even a small part of that total into investment vehicles is the big opportunity for mutual funds. Thus, the SFA in Switzerland currently is running a CHF1 million campaign promoting the transparency, diversification, liquidity and safety of mutual funds through a series of television and online ads featuring a savvy owl.

See for yourself, boring is the new black: http://www.myfund.ch (Fonds. Die kluge Anlage.)