RESEARCH REPORT
Creating the wealth management firm of tomorrow
3-MINUTE READ
July 22, 2022
In brief
- Accenture and PIMFA teamed up to survey wealth management firms in eight European countries on current and emerging industry trends.
- Respondents to our survey saw the future of wealth management as being shaped by industry consolidation, new technologies and a talent shortage.
- As a fourth theme, participants in the survey identified a need for more operational agility to be essential to capture the next wave of growth.
- Becoming agile would require among others address clients’ increasing focus on ESG, improve the client experience, and realize hybrid advice models.
An era when change is both constant and compressed
In the past 24 months, wealth managers in Europe have faced unprecedented seismic shifts. As Europe’s societies strive to emerge from the turmoil of COVID-19, two key questions are dominating wealth managers’ thinking in the region:
- What will the post-pandemic world and marketplace opportunities of 2025 look like?
- What will it take for firms to change—and how fast will they need to move to be future-ready for sustainable growth and returns?
Accenture teamed up with PIMFA to take the pulse of the industry in the UK and across Europe, with in-depth research across C-Level executives to understand the key industry drivers and disruptions that could most impact wealth management firms’ current and future priorities. Our survey also looked at firms’ business models and their change programs for the coming three years and beyond.
The wealth management firm of tomorrow
Four key strategic themes shaping the European wealth management marketplace of tomorrow
1. Impact of industry consolidation
The traditional line-up of industry players is changing, as continued advances in technology accelerate the entry of FinTech and “digital attacker” players to the market, and as incumbent players adapt their strategies and business models.
91%
of respondents expect greater industry consolidation
2. Greater adoption of new technologies
Firms need to develop more business-led technology strategies and approaches to leverage new technologies and further automate the business.
88%
of respondents believe greater adoption of new technologies could significantly impact the future
3. Increasing challenges around talents
There is also a generational transition taking place among investment advisors and relationship managers. Given the importance of strategic talent acquisition to augment capabilities for growth, industry participants might need to deal with skill gaps while trying to realize their growth ambitions.
70%
of respondents agree that the shortage of talent and skills could have a significant impact on the industry
4. Operational agility
To address the above issues and drive growth, respondents recognized the need for greater operational agility.
92%
of respondents expect better organizational agility will be key to future success
Why change is important to drive growth
As the industry is set to change, it is already apparent that not all firms will master change and realize growth to the same extent. While the industry proved resilient during the pandemic, one of the interesting findings from our research is a wide divergence in growth rates of assets under management (AUM). While some firms saw their AUM edge up just 1 to 4% in 2021, or even stay the same, others were putting themselves in a stronger position.
Respondents identified five driving forces for future growth:
- Addressing the shift in client priorities toward ESG and improving the client experience
- Deploying rapid innovation in new investments and advice solutions
- Realizing hybrid advice models to tap into underserved markets
- Improving advisor talent strategy
- Mobilizing the right mix of technology and platforms
We are pleased to see wealth executives identifying the key areas within their organizations that they need to transform to remain relevant with clients, particularly as the pace of intergenerational wealth transfers across Europe quickens
Liz Field / Chief Executive – PIMFA
How to change the wealth management business model and value metrics
Three calls to action could lay the foundations for future success:
- Reset
Reset external perception of the industry through closer alignment with environmental and social trends.
- Adopt
At firm level, adopt new frameworks and change approaches to drive growth in more agile ways.
- Deliver
Become more data-driven by delivering against 360° value metrics.
Sticking with what worked in past might no longer be a viable option for any firm, whatever its size, location or focus in terms of client segments. Equally, significant new growth opportunities are there to be seized—and there is still a great deal of value on the table waiting to be captured by firms that can change to be future-ready.