Despite growing external threats to wealth managers’ businesses, including losses from intergenerational wealth transfers, nearly four in five wealth managers (78%) in Europe and Asia don’t plan significant changes to their traditional business models, according to a new report from Accenture and Orbium, part of Accenture Wealth Management.
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“If wealth managers want to survive and thrive beyond these unprecedented times, they must focus on differentiation and innovation while maintaining their core mission of safeguarding clients’ assets”
Specifically, while many wealth management executives understand that successfully addressing industry challenges will require new business models, the report found that they are hesitant to move forward with bold strategies for business model transformation that capitalize on emerging technologies.
The report, “Survive and Thrive to 2025: Insights from the Wealth Management C-Suite,” is based on a survey of 51 C–suite executives at leading private banking and wealth management firms in Europe and Asia.
Wealth managers surveyed expect to lose, on average, nearly one-third (32%) of their own wealth assets under management through intergenerational wealth transfers, which Accenture predicts will be US$40 trillion of investable assets over the next 30 years.
The report notes that to address this challenge, large wealth managers will need to serve multiple generations of investors who are looking for tailored, digital services that align with their social and personal values, including impact investing and environmental, social and corporate governance (known as “ESG”). To do this effectively, firms must address their inflexible business models and talent and capabilities gaps so that they can better engage in multi-firm ecosystems, platforms and partnerships.
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