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Banks expect wealth management practices to grow 25 per cent in next five years


Many banks are repositioning for growth and are looking toward new revenue opportunities, particularly from fee-based businesses like wealth management, according to a report from Fidelity Institutional.

The inaugural Fidelity Bank Wealth Management Study, which canvassed the views of more than 140 senior bank executives, reveals that this shift comes after several years in which banks were focused primarily on compliance and cost management.
Over half (55 per cent) of the bank executives expected the revenue contribution from their wealth management practices to grow 25 per cent or more in the next five years.
Although the future of wealth management appears positive for banks overall in this study, given the expected growth rate, a group of Pacesetters stood out from the pack with wealth management typically estimated to represent 35 per cent of total bank revenue in the next five years, versus 20 per cent for other banks.
“While some may assume that Pacesetters were the largest banks or clustered in certain regions, our study found that what really set these firms apart was how they run their wealth management practices,” says Mike Norton, head of the banking segment for Fidelity Institutional. “Pacesetters recognise that wealth management not only offers significant revenue-generating potential for banks, it also presents an important client engagement and retention opportunity.”

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