Here is the latest in a series of commentaries by consultants on this news service about the issues facing the world's wealth management sector.
This publication has approached a raft of consultants operating in the wealth management sector to give their views about a range of challenges and opportunities for the industry in different parts of the world. A number of articles are being released in these pages in the coming weeks and we hope readers find them stimulating. The articles have been sought by this publication and also by Bruce Weatherill, of Weatherill Consulting, and also chairman of ClearView Financial Media, publisher of this news service.
Here are comments from Jeremy Jensen, PwC wealth management partner and Ian Woodhouse, PwC wealth management director.
It’s useful to reflect on the critical issues that wealth managers face in 2014 and how leading players are positioning themselves to capitalise. The challenge is to understand how best to capitalise on the industry inflection point.
A combination of powerful forces - client evolution, changing expectations, complex regulations, technology changes and more volatile markets - are driving the wealth industry to an inflection point. This is reflected in pressures to grow revenue and contain litigation and compliance costs. PwC’s latest Global Private Banking and Wealth Survey shows global cost/income ratios at 65 per cent in 2013.
Typically, in an inflection point, traditional competitive advantages come under pressure from new and disruptive entrants. This usually results in industry consolidation and exits. Subsequently, a new line up of industry winners and laggards emerge.
This is a challenging time for wealth management firms, but can also represent an opportunity for those organisations that can understand the key trends, are willing to challenge the status quo and who can capitalise on the inflection point.
Our survey shows a realigning of budget spend priorities. Supporting and enabling business growth is now the main priority for respondents, followed by cost reduction through enhanced efficiency, becoming a more client focused organisation and addressing legal and regulatory compliance also emerging as key themes.