The wealth and asset management industry may have been in growth mode, with assets under management (AUM) on the up and margins on the mend. But there are also simultaneous undercurrents of profound change, heated competition and margin pressures.
That’s according to a new report by Forbes Insights, in association with EY and SEI Investments Company, "Seeing Beyond: Unlocking the Long-Term Opportunities in Wealth and Asset Management, which reveals that a full 83 per cent of respondents agree or strongly agree that they are facing significant competitive pressure, indicating that the industry is experiencing considerable stress.
Nearly half of executives in the survey (49 per cent) meanwhile, say they believe their segment is undergoing significant change.
“This report depicts an industry trying hard to anticipate change and stay ahead of the curve,” says Forbes Insights’ Bruce Rogers, Chief Insights Officer.
“As we have seen over the years in many other industries, top-line growth can only carry a firm for so long; consistent bottom-line growth and profitability is what really matters sooner or later,” says Marcelo Fava, principal, Ernst & Young LLP and its Wealth Management Practice lead. “The best opportunities for wealth and asset management firms reside in having an optimal operating model across client segments, channels, products and platforms that can effectively and efficiently predict and address the changing needs and demands of their clients (both institutional and individual).”
Mark Samuels, Executive Vice President and Chief Marketing Officer at SEI, says: “At SEI, we are excited to be a part of this research and report because it explores trends we are seeing in our markets every day.”
“The wealth management industry is facing rapid changes in terms of resources, risk, client relationships, growth, and profitability. We believe now is the time for industry members to examine their business models in order to better prepare for the future. SEI’s goal has always been to help our clients create long-term, sustainable growth, and crucial to this is our focus on innovation. Studies, like this one, support that goal. These report findings are further evidence of the transformation that is happening in our industry, and we are pleased to share this perspective to our clients and the broader wealth management space.”
The report is based on a survey of 407 senior executives from mutual fund advisors, banks or trusts, insurance companies, hedge funds, broker-dealers and wealth managers.