10 tips for both asset management and wealth management
Mergers and acquisitions will accelerate and improve growth, profitability, and performance
Although consolidation has accelerated over the past year, wealth management remains one of the most fragmented segments of financial services.
Theoretically, everything speaks in favor of consolidation:
It promotes growth, closes skills gaps, and alleviates cost pressure through economies of scale. In Europe, large asset managers would have a cost/income advantage of ten and 20 percentage points, respectively, over their medium-sized and small competitors. This is increasingly causing investors to examine buy-and-build strategies in this area. Mergers and acquisitions need to move higher on management teams’ agendas.
Partnerships and ecosystems promote customer well-being
To maintain profitability and meet client needs, asset managers need to offer more holistic solutions, according to Oliver Wyman. The best way to expand their offerings to non-traditional assets and services is through partnerships. Ecosystems would allow asset managers to connect with partners that provide access to insurance, banking, healthcare, and other services.
The job of the advisor should change.
Digitalization, multi-channel sales, and remote consulting require a rethinking of the consultant’s position. Many conventional tasks have been computerized, and new skills must be taught. To grow, asset managers require better advisors rather than more of them.
Organize income more effectively
Margin pressure is rising, fees are becoming more transparent, regulations are changing, and there is greater competition from digital suppliers. Dynamically managing their revenue allows asset managers and wealth managers to grow it by 15 to 20 percent and hold onto it for an extended period. This entails knowing your profit potential, determining prices, and effectively managing sales. Incentive programs also need to be focused on making money. Artificial intelligence and data analytics can support these advancements.
Defend cyber attacks
In addition to all the advantages, increasing digitalization also entails risks. it makes asset managers a potential target for cyberattacks. These are associated with high financial and image damage. Customer data is particularly worth protecting. If asset managers are well protected, they must also communicate this to their existing and potential customers to build trust.
All ten points at a glance:
The need for intelligent, personalized advice is growing
Hybrid consulting helps meet customer expectations
Private market offerings are evolving from “nice to have” to “must-haves.”
Digital asset strategies and offerings are becoming essential
Asset managers need to offer impact investing rather than just ESG products
Consolidation drives growth, profitability, and performance
Asset managers need to build ecosystems and partnerships to offer holistic solutions
The role of the advisor needs to be redesigned
Yields must be managed dynamically
Asset managers must protect themselves from cyber attacks
