The latest survey from the CBI/PwC Financial Services Survey finds that levels of optimism in the asset and wealth management sectors have increased over the previous quarter.
The survey also found that businesses within the sector are now turning their focus to cutting costs and reducing fixed overheads. They are also grappling with increased competition and new regulations.
Elizabeth Stone, Asset and Wealth Management Leader at PwC UK, says: “While it’s true to say that there are significant challenges for the sector, not least from cost pressures and increased competition, the latest results suggest a cautious optimism.
“Firms are reporting confidence in their operational resilience which may be due to the sectors’ Brexit planning meaning an imminent Brexit will have less of an impact than in other areas of financial services.
“However, pressure on fees and demonstrating value for money will continue to test the sector. To date sector infrastructure models remain largely unchanged and have been less impacted by disruption when compared with other financial sectors. As a result, we are yet to see the substantive flow on of cost savings and efficiencies that could stem from disruption.
“To counterbalance this, firms must prioritise articulating their strategy and value proposition, and look to invest more in technology, and upskilling their people.”
The survey revealed that due to the sectors increasing move towards a more technology-driven model, the skill set of investment managers is changing. This is resulting in an increase in spending on training, as firms start to re-skill their people to fit the new business model, the survey says.
Firms are also starting to invest in new technology such as AI, to enhance the customer experience, according to the survey, following the trend set by the other sectors and to support this uptick, there is a drive to increase spending on IT more generally to boost efficiencies and speed.
Additionally, now that distribution channels are better-established and working well, investment firms are now able to put more focus on the use of innovative technologies to disrupt the way they use their CRM to engage with customers and third parties, the survey says. By digitising existing services, there is an opportunity for growth by better targeting of investment solutions to meet the needs of new and existing customers, the survey concludes.
