Manulife (NYSE:MFC) has launched Manulife Private Wealth, a wealth management service catering to high net worth clients in Canada.  The first branch of the division opened on Thursday, September 13, in Toronto. Another branch in Vancouver is scheduled to open in 2013. Manulife will leverage its experience in global investment management to attract clients, providing banking services as well as wealth-related services such as private company advisory and tax and estate planning services.
We have a price estimate of $13 for Manulife’s stock, in-line with the current market price.
Manulife has a long history of delivering wealth management products such as mutual funds, fixed and variable annuities, guaranteed investment certificates and high interest savings accounts. The company has generally done well in its home country; it reported a 7% increase in sales in 2011 over 2010. The main driver behind this growth was the popularity of its mutual fund offerings as mutual fund retail deposits grew 45% year-on-year to a record C$2.0 billion.
This financial year, however, has not been that good for the Canadian insurance and wealth management division, which accounts for 11% of our price estimate for Manulife’s stock. Wealth sales in the second quarter fell 12% year-on-year as the growth in mutual fund sales was affected by a decline in the equity market. Stiff competition faced in the Canadian market also dampened sales. Targeting affluent customers might prove to be a savvy strategy as they are more likely to invest and protect their wealth in an uncertain economic environment. We expect the launch of Manulife Private Wealth will provide wealth management sales a much needed shot in the arm, allowing for steady growth in assets under management.
In the U.S., Manulife’s life insurance division, John Hancock, has released two new iPad applications to support producers.  The JH Life Briefcase will allow John Hancock’s Universal Life producers to store. organize and manage illustrations and client-related information whereas the JH MarketPlace will provide access to information on life insurance products, advanced markets, underwriting and new business sales materials. The applications are designed to provide Manulife’s sales team a competitive edge to help distribution, which is particularly important for sales in a mature market such as the U.S.
U.S. insurance sales increased by 17% in the second quarter of 2012, and we expect further growth in the coming years.
You can gauge the impact of a change in forecasts on our estimate by modifying the charts above.Notes:
- Manulife Financial Launches Manulife Private Wealth for High Net Worth Canadians, Press Release, 13th September, 2012 [↩]
- John Hancock Life Insurance Launches Two New Ipad Apps for Producers , 10th September, 2012 [↩]