Accenture Orbium WM survey: Survive and thrive in 2025
June 20, 2020
In brief
In brief
- We spoke to senior executives from over 50 top tier private banks and wealth managers across Europe and Asia about the industry outlook to 2025.
- Wealth Managers (WM) report they face challenges from intergenerational outflows and significantly increased market volatility.
- In return, the emergence of non-bankable and private assets has unlocked a potential holistic personal wealth opportunity of $260trillion.
- Our survey results suggest concrete steps WMs could take to better prepare themselves to offer value to their current and future clients.
Change is coming fast and will be extensive
The survey comes at a time of great industry turmoil as seismic shifts are being accelerated by the COVID-19 pandemic. Our participants, who together manage a combined $5.6trillion AUM, provided valuable insights on the industry outlook to 2025.
Change is coming fast and will be extensive. Private banks and wealth managers might be underestimating the full extent of industry change on the horizon. However, it is surprising that our survey shows that 78 percent of WMs in Europe and Asia believe their current business models will survive through 2025.
Megatrends reshaping client expectations and values
Participants highlighted six megatrends they expect will have the most impact on making their businesses more dynamic and delivering higher client value going forward. Together, these trends will shape further opportunities for the industry to evolve and provide new offerings for the next generation of clients.
Ecological and environmental concerns
Act as a responsible corporate citizen with regard to climate change by advocating sustainable business practices and embracing net positive strategies.
Trend towards hyper-personalization
Engage with clients as partners and cater to their specific needs through customized solutions.
Paradox of personal data
Balance privacy with security needs to capitalize on global connectivity and deliver value while managing risks.
Rise of platform ecosystems
Seamlessly integrate internal and external partners and centers of excellence to achieve scale across business and technology.
Shift from support to value generation
Amplify and enable communication, collaboration, interaction, exchange and connectivity.
Emergence of new technologies
Use the right mix of new and traditional technologies, such as AI and machine learning, to gain a competitive advantage.
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In addition to the megatrends, participants identified three fundamental industry changes that require a response:
- Addressing wealth succession outflows: WMs surveyed expect to lose on average one-third (32%) of their clients’ wealth at the point of succession. This outflow is estimated to be $40trillion in investable assets over the next 30 years, or $1.5trillion per annum (p.a.).
- Raising the bar on talent: WMs understand that they need to invest more in attracting and retaining the right talent and change the culture to better serve clients. Most respondents cite talent as a top-three investment priority over the next five years.
- Overcoming business model change inertia: nearly four in five WMs (78%) in Europe and Asia don’t plan to make significant changes to their traditional business models.
$1.5
$1.5 trillion p.a. of assets leave firms following succession
78%
78% need to address business model inertia
However, while many see clouds ahead, surprisingly most participants remain optimistic about the untapped wealth management market opportunity in the short and long term. Clearly, to deliver future value firms must take a much broader view of the market beyond their traditional playground. The prize for doing so is significant, with approximately $260trillion in holistic personal wealth (including non-bankable assets) at play.
The future should be bright for those who can successfully transform by designing a roadmap to deliver their future ambitions, co-creating and delivering at scale and pace.
Wealth Management is now a $260 trillion opportunity. Non-bankable assets increase holistic personal wealth by 30%.
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