Will women and millennials transform the wealth management industry?
TORONTO, July 10, 2013 /CNW/ - Despite the resurgence of global wealth
to nearly pre-2008 levels, the wealth management industry is facing
significant margin pressure caused by stringent and costly regulatory
requirements, uneven growth across geographic markets, loss of certain
types of fees and subdued client activity. These dynamics are further
compounded by shifting demographics and existing challenges around
operations, technology, and talent management. According to a new report from PwC, surviving and succeeding in this environment requires changing to a
more consultative business model that places a premium on "doing the
"Wealth managers need to be innovative and proactive if they are to
rebuild public perception and gain higher levels of client confidence
and trust," says Raj Kothari, PwC's National Asset Management Leader and GTA Managing Partner. "Wealth managers must demonstrate how
they are doing the right thing, including putting the needs and
interests of their clients ahead of simply maximizing profits. This
will require a behavioural change among producers, distributors and the
PwC's 2013 20th Anniversary Global Wealth Management Survey found that wealth managers are failing to capitalize on
intergenerational and gender opportunities. In particular, the industry
needs to become more sophisticated at understanding the values of their
millennial and female clients, and develop propositions aligned to
Petrina Dolby, Senior Advisor of PwC's Canadian Wealth Management
Consulting practice says, "Our research shows that millennials are more
involved in their wealth creation and management, regardless if they
are first, second or third generation wealth holders. They will change
jobs more frequently, put a greater emphasis on flexibility in how and
where they work, have increased life expectancies and care deeply about
their broader communities using social media as a matter of fact tool."
She continues, "Most strikingly, millennials feel very strongly that
they are not being listened to by the wealth advisors of their
parents. This puts them as a flight risk."
Dolby also says that women continue to be an increasingly important,
empowered and wealthy client demographic but again, this growing
segment does not feel empowered in the wealth management space. Only 8%
of PwC's survey respondents consider gender when segmenting their client base.
"Women tend to outlive their male partners and stand to gain control of
wealth through not only their own efforts but also through inheritance
and divorce," says Dolby. In addition, women are gaining more seniority
as business leaders and are often the decision makers in next
generation wealth transfers within family groups, having close
relationships and contact with the next generations.
Dolby says, "Wealth managers need to better understand the different
networks of influence which younger generations and female clients rely
on for decision making, including that access to the matriarchal side
of the family can provide great connections to the next generation."
"To be successful the industry must develop offerings that address the
unique characteristics of the demographic reality, which requires going
back to the basics of understanding the unique needs of your client."
Regulation will continue to play a greater role in driving choices for
wealth managers deciding where to concentrate their activities across
clients, propositions, products and servicing models.
Compliance replaced reputation as the top risk management concern in the
survey, as wealth management firms struggle to keep pace with the
scale, speed and costs of current and planned regulatory change. The
cost of compliance will continue to rise, with respondents forecasting
that risk and regulatory compliance expenses will account for 7% of
annual revenue in two years, up from 5% today.
The survey noted an unprecedented level of frustration among senior
executives who are finding themselves increasingly challenged to keep
up with not only the business as usual pressures, but increased
compliance and scrutiny.
"The industry is struggling with challenges around a combination of
major external changes. The future will be less about providing
products and services and more about delivering solutions and advice.
Trust, reputation and brand will all play a greater role in client
propositions and perceptions of value," says Kothari.
For more information, or for a copy of the report, please visit: http://www.pwc.com/wealth2013. A copy of the report is also available from the media contacts.
For more information about PwC's Asset Management practice, please
About the PwC Global Private Banking and Wealth Management Survey
PwC's 2013 Global Private Banking and Wealth Management Survey reflects
the changing industry landscape and adds our own point of view to
provide the global wealth management community with an independent
framework, to guide further analysis and thought around how to evolve
business today to better serve the needs of clients tomorrow.
The report surveyed 200 institutions from more than 50 countries with a
host of different operating models and businesses across all segments
of global wealth management. Participants' combined responses yield a
fascinating self portrait of global wealth management both now and into
the coming years.
About PwC Canada
PwC Canada helps organizations and individuals create the value they're
looking for. More than 5,700 partners and staff in offices across the
country are committed to delivering quality in assurance, tax,
consulting and deals services. PwC Canada is a member of the PwC
network of firms with more than 180,000 people in 158 countries. Find
out more by visiting us at www.pwc.com/ca.
© 2013 PricewaterhouseCoopers LLP, an Ontario limited liability
partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the
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SOURCE: PwC Management Services LP
For further information:
Contact: Emily Abrahams
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T: +1 416 890 8695