Global wealth management outlook 2014–15
The most recent in a growing body of wealth insights by Strategy& looks at the prospects for the global wealth management industry in 2014/15. According to the study, assets under management have seen a significant upswing around the world but these gains have not translated into the top-and-bottom-line growth that wealth managers would expect based on past recoveries. While prospects for wealth management have improved significantly over the last twelve months, wealth managers must learn new rules quickly and adapt their playbook accordingly if they are to capitalize on the continued economic recovery.
The global wealth management outlook suggests a four part solution to help wealth managers adapt to changing conditions: apply a “capabilities lens” to look for markets where you can compete effectively; rethink your firm’s value proposition with tiered offerings aimed at transparency and customer suitability; go digital with more effective use of information and communication tools; and use a Fit for Growth* approach to adapt your cost structure to the revenue realities.
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In this short video interview, Strategy& partner, Alan Gemes, co-author of the global wealth report, discusses how wealth managers must learn and adapt to the changing rules of the wealth management sector in order to fully capitalize on economic growth opportunities.
This graphic shares data from Strategy&’s global wealth management outlook 2014-15, a study of how new global regulations, changing client behavior, the rapid advance of digitization, and a fluid competitive landscape are permanently changing the rules of the game in wealth management.
Strategy& partner, Alan Gemes, discusses the global wealth management study and its findings.
Populations in industrialized countries are aging, defined benefit pensions are disappearing, and investment returns have been challenged by a long period of volatility and low interest rates. These changes have affected the needs of wealth management clients, but many firms are slow to adjust.
For most banks, making inroads with the mass affluent population — those with liquid investable assets ranging from US$250,000 to $1 million — has proven difficult. But banks have an under appreciated advantage with the “rising mass affluent” (RMA) — those between 30 and 49 years old.
Digitization will transform the wealth management and private banking industry in the coming decade. The firms that develop a coherent plan will give themselves a head start in capitalizing on the advantages, which include stronger client relationships, reduced operating costs, and enhanced risk management and regulatory compliance capabilities.
To succeed in the decade ahead, established wealth management companies will need to leverage technology in much the same way that their cutting-edge counterparts have in other industries. (Financial Times ‘The Connected Business’ guest column)
* Fit for Growth is a registered service mark of PwC Strategy& LLC in the United States.