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Per-capita wealth declined last year for the first time since 2008. In its 2023 global wealth report, UBS also revealed that the number of dollar millionaires fell 6 per cent to 59.4mn. Those with $50mn or more to their name numbered 243,000, down 8 per cent.

And yet, UBS — bolstered by its takeover-cum-bailout of Swiss rival Credit Suisse — and its big US rivals are crowding into wealth management as eagerly as ever. There are at least three reasons. First, they have been encouraged by investors and regulators who dislike the volatility of the groups’ investment banking operations, historically a far larger share of earnings. Second, many are convinced they can win market share from rivals even in a tricky near-term environment. And third, they believe the long-term growth trend will soon resume.

The immediate prospects, though, are undeniably muted. The net declines in UBS’s sector analysis were largely due to asset price deflation as the easy-money wealth accumulation of the last 15 years has gone into reverse. Global inflationary pressures helped boost nominal wealth, but that was offset by dollar strength. And the downward pressure will continue: central banks’ accommodative quantitative easing programmes in the US and Europe have still to be unwound and the delayed impact of higher interest rates on property prices — the core of much individual wealth — has yet to feed through. With policymakers maintaining a mantra of higher-for-longer interest rates amid continued inflationary pressures, high-end wealth could well decline further over the next year or two.

In addition, China’s rapid economic expansion, one of the biggest drivers of global wealth, has slowed dramatically. In 2022, according to the UBS report, more of the top 10 per cent of global wealth resided in China than in any other country. But with the country’s GDP growth now down to a run rate of 4.9 per cent, a third of its 2007 peak, it will be a less reliable conveyor belt of wealth clients for global banks.

None of those pressures is deterring the banks. The latest to push the wealth narrative is Citigroup. “Growing the wealth business is a strategic priority,” chief executive Jane Fraser wrote on LinkedIn last month, as she welcomed Andy Sieg to Citi after a long career at arch rival Bank of America’s Merrill Lynch Wealth Management. Sieg sees some easy wins for Citi: a large (undisclosed) portion of the bank’s 500,000 or so wealth customers, with circa $900bn of “client balances”, use it to deposit money, and to borrow, but not to invest.

The big beasts of wealth management — Morgan Stanley (the world leader, with $4.8tn of assets under management) and UBS (the number two, with $3.7tn) — are also aiming to grow. The Swiss group must offset the risk that clients who had split their business between UBS and Credit Suisse decide to move some assets to a third party. Chief executive Sergio Ermotti must also overcome the inward-looking distraction of combining the two entities. But he is clear that in addition to cementing UBS’s strong wealth management position in Asia and the Middle East, there is scope for growth in the US, where he is eyeing the 36,000 individuals with liquid assets above $100mn

Morgan Stanley, meanwhile, is seeking further expansion as well. The group has a target to boost wealth and investment assets from more than $6tn today to $10tn over the next few years. One route to expansion will be to make more of the group’s partnership with Mitsubishi UFJ Group, the Japanese bank that became Morgan Stanley’s 21 per cent shareholder amid the 2008 financial crisis. Most obviously, it could expand the range and volume of products disseminated to Japanese clients via its partnership with MUFG. There may also be scope for wealth growth through acquisition, especially outside the US.

But with any large bank likely to find major deals tricky from a regulatory point of view, the world’s wealth managers will be counting principally on organic expansion. There may be opportunities to take a larger slice of the pie from rivals, but the pie will expand too, wealth experts predict. UBS’s projections suggest global wealth will rise by 38 per cent between 2022 and 2027, with most growth driven by middle-income countries; Bain & Co reckons nearly $230tn will be available to global wealth managers by 2030. The key question in the meantime is whether the wealth management opportunity will match the banks’ enthusiasm: herd mentality rarely ends well.

patrick.jenkins@ft.com