Clients are now less loyal to their service providers because they are better informed on their financial affairs.

A new study by PricewaterhouseCoopers shows that client expectations and regulations play key roles in shaping today's wealth management landscape.

According the report Anticipating a New Age in Wealth Management, which is based on the responses of 275 institutions in 67 countries, clients are now less loyal to their service providers mostly because they are better informed on their financial affairs. Active client participation is also more evident with the rise of boutique firms that offer a more personalised and customised approach to wealth management.

For the first time in its 20-year history, the bi-annual report was issued in Mandarin Chinese, highlighting the importance of China and Asia-Pacific as a growth area for the wealth management business.

"New competitors are challenging the dominace of established private banking players. The impact of new regulations and more demanding client expectations are forcing private banks and wealth managers to change their client service infrastructures and the way they operate," said Dominic Nixon, the Asia-Pacific financial services leader for PwC in Singapore.

In the biennial report, price and regulations emerged as the most powerful drivers of change in the industry. Shifting cross-border standards and issues on customer protection and transparency are expected to affect the front-end experience and increase costs.

Among the main findings was that this remains a costly business: the average cost-income ratio for firms is 71 percent, with only a small percentage achieving a ratio of 60 per cent or less.

The survey also found that the most pressure comes from five areas: performance and change, markets and clients, client relationship managers and human capital, operations and technology, and risk management and regulation.

"The centre of gravity for wealth management is moving, and established centres are under pressure from emerging markets. In response to increased regulatory pressures, our respondents see Switzerland, London and, to a lesser extent, New York, all being challenged by the rise of Singapore and Hong Kong in the coming two years," added Justin Ong, the Asia-Pacific head for global private banking and wealth management.

"Wealth managers have to work harder to earn clients' long-term loyalty and trust. This is particularly true in Asia where the difficult experiences of customers when dealing with their private banks during the financial crisis have been imprinted into their psyches, and private banks need to continue their focus on being truly client-centric," Ong added.

The PwC study was conducted between December 2010 and April 2011.