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PwC’s wealth survey will reveal key trends in wealth management


Work is underway on the mammoth project that is the PwC Global Private Banking and Wealth Management survey due out later this year. Andrew Hogan, PwC Partner in FS Consulting and member of PwC’s Global Private Banking Wealth Management team, explains that this year’s issue will be exploring and analysing current and future trends in global wealth management.

“There’s a continuing trend towards increased and relentless regulation in all wealth markets, and that is having multiple effects on wealth management business models everywhere” he says.
Legislation similar to the UK’s RDR is popping up in other markets around the world, including Asia, Australia and continental Europe. “There is a greater focus on transparency and good client outcomes, and less tolerance for commission based revenue streams” he says. “These are challenges for wealth managers who are taking a careful look at where and how they will specialise across the wealth industry value chain.”
Hogan says that some organisations have in the past tried to be all things to all men, but future winners will be those that focus on specific client segments and differentiate their market offering relative to their competitors.
“At certain levels of the wealth pyramid, there has been an increased trend towards ETFs and passives in investment solutions, and it is often difficult for wealth managers to differentiate themselves purely on the basis of their product proposition. Some players have recognised this and have started to look elsewhere for their differentiation, including on the client interaction, service and advice end of the value chain.”
Hogan says, “Despite all the recent talk of consolidation, there is still much fragmentation across the wealth management industry and there is still room for a variety of different business models to survive and thrive. No one single wealth management business model is likely to dominate.”
The importance of digital offerings in wealth management continues to be a major industry theme. “There are segments of consumers that will be increasingly comfortable engaging with wealth managers in a digital way” Hogan says and he believes it will not be just self-service wealth models that will develop, but also hybrid wealth management models that blend traditional client engagement with new digital capabilities.  
“Both will be relevant. We see that some wealth clients are happy to self-serve on investments and financial planning and see their interactions with their wealth manager in a similar way to their interactions with other online service providers.  This is true for the so called digital natives and it’s also true for a growing number of older clients who do not necessarily always reject new technology” he says. “We are starting to see people who are at pre-retirement and retirement age who are comfortable with digitally enabled wealth solutions.”
Hogan observes important differences in the rate of growth in wealth across different geographies, “Emerging markets are continuing to show faster levels of growth across the wealth spectrum than those seen in more traditional wealth markets”.  
He acknowledges that global wealth management organisations need to adapt their offerings and client engagement models to local client needs and market conditions, “They need to allow for local and regional differences when it comes to interaction styles and investment preferences. Local market circumstances vary such that a single, global approach is not likely to be effective at the client-facing end of the value chain.” he says.

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