In this video Kai Upadek, Head of Wealth Management at Oliver Wyman, and Kinner Lakhani, Head of European Financials Research at Deutsche Bank, discuss the findings of the 2019 edition of the annual Global Wealth Management report.
This year’s report has found that:
Global HNW wealth grew by 4%, far below that of recent years. Wealth Management business valuations decreased by more than 20% in 2018, driven by lower AuM growth, challenging markets and continued fee compression
The revenue pressure felt by Wealth Managers in 2018 on the back of increased market volatility highlights the continued vulnerability of operating models to market stress. The rebound in early 2019 brought short-term relief for some but further pressure is inevitable as the end of the cycle approaches
As a result, there are two key priorities for Wealth Managers:
Rethink the footprint in Emerging Markets
To realize above average growth, serving developed markets will not be sufficient. More than half of HNW wealth growth will originate in Emerging Markets, compared to one third of stock today. Wealth Managers need to rethink their positioning in Asia-Pacific and Latin America in particular.
Simplify the operating model
Wealth Managers need to demonstrate their ability to prepare their operating models for the approaching downturn by simplifying front-office operations and getting into the driver’s seat for allocated costs.