The wealth management industry is set for a significant shake-up as a result of intense competition, increasing client demands and current economic uncertainty, according to a new study by PricewaterhouseCoopers (PwC) and the Economist Intelligence Unit (EIU).
The study, "Wealth Management at a Crossroads: Serving Today’s Consumer," reveals that wealth management clients are dissatisfied with the service they currently receive and are calling for skilled advice from the institutions to guide them through the economic downturn.
Jeremy Scott global head of PricewaterhouseCoopers financial services practice, comments: “The pressure is mounting for the wealth management industry across Asia, Europe and the US. Providers are having to look harder than ever at how they can meet client expectations and still make a decent profit.”
Results of an online survey amongst mass-affluent clients, as part of the study, show 43% of respondents are considering changing provider. Thirty-one per cent of respondents say they choose to stay with their existing provider only because of lack of alternatives.
Whilst 17% of respondents currently have central relationships with their wealth management institution, a significant 41% wanted this type of contact.
PwC and EIU believe a combination of better training and use of technology to explain complex information to clients is required to enable wealth management institutions to be more cost effective.
Bruce Weatherill, global audit and advisory private banking partner at PricewaterhouseCoopers, says: "Realistically only two groups have a chance of meeting these demands while keeping costs under control. Large conglomerates with the financial clout and global scope to tailor complex products to a range of international markets across a large client base. The other group are the niche players that are able to a provide high quality, highly personalised advice and service.”
“Those companies caught in between these two groups, who can neither offer bespoke advice nor the global product range and enabling technology of the larger groups, will be under severe pressure,” he warns.