New Oliver Wyman wealth management report: Running faster to stand still

• Assets under management growth is expected to slow from 7% p.a. over the past five years to 5% p.a. until 2020 
• To sustain profitability, the industry will need to redesign the ‘core’ high-net worth service model and digitize parts of the value chain
• The industry should explore new sources of value creation, such as platforms that enable investors to access opportunities such as growth stage financing or direct real estate investments

Dubai, UAE, July 20, 2016:  Oliver Wyman today released its first report on wealth management in a new initiative that will become an annual series of in-depth reports on the sector. The aim of the report is to provide insight into the outlook for the wealth management industry at a time of sustained interest in the sector among investors and financial institutions. 

“The forces that drove performance in wealth management in recent years are changing, and firms will need to take action on costs and develop new ways of engaging with clients to maintain revenues,” says Christian Edelmann, global head of Oliver Wyman’s Wealth and Asset Management practice.

Key highlights:

• Assets under management growth is expected to slow from 7% p.a. over the past five years to 5% p.a. until 2020 on the back of lower asset returns. Fees may come under pressure due to higher transparency standards, emerging competitors and the shift to passive products.
• To sustain profitability, the industry will need to redesign the ‘core’ high-net worth service model and digitize parts of the value chain.
• The industry should explore new sources of value creation  such as platforms that enable investors to access opportunities such as growth stage financing or direct real estate investments.
• Leaders will need to sharpen their focus on client acquisitions and managing attrition risks, in particular with respect to inter-generational wealth transfers.
• Wealth managers should expand their existing philanthropy offering into full charity operations support, following the trend of professionalisation in charitable giving.

The report, Wealth Management: Running faster to stand still, was co-authored with Deutsche Bank Research.