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Confidence falls for asset and wealth managers amid volatile markets, says CBI/PwC survey

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The asset and wealth management industry has seen its first significant fall in confidence since the winter of 2011, according to the CBI/PwC financial services survey. 

The fall is largely due to continued difficult markets, political uncertainty and a drop in profitability at the beginning of 2016, which has led to a decline in prioritising new product launches and M&A, and more focus on core activities such as customer retention and strategic partnerships. 

Mark Pugh (pictured), asset and wealth management leader at PwC, says: “There has been a notable fall in confidence amongst asset and wealth managers during the last quarter, with the current global market turmoil having had an inevitable knock-on effect on confidence. And as companies begin to feel a real squeeze on margins, we are seeing a clear focus on both cost and competition.” 

“A continued investment in marketing shows certain organisations are holding their nerve and continuing to invest for the future. However, companies will be asking themselves how much longer they can maintain this position and when they may need to consider retrenching and looking to further cost cutting.” 

When it comes to anticipating and planning for cyber threats, asset and wealth managers are lagging behind the wider financial services (FS) industry.  Strategies for penetration testing, incident response mechanism testing and collaboration with partners against cyber threats stand out as three key areas where asset and wealth managers are falling behind the FS industry. 

Pugh says: “Other FS sectors, in particular banking, have been on a journey to build cyber resilience for a while and, as incidents in asset and wealth management will only become more frequent, the industry needs to up its game.

“Senior executives are having to take ownership of cyber strategy and investment in preventative testing and technology needs to be a priority. This is tough in such difficult markets but the reputational and economic risks are too large to be ignored.

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