Majority of CEOs in the asset and wealth management industry are confident about the growth of the industry, but are slow to innovate and capitalise on opportunities including technology, according to a global survey by PwC.
About 92% of asset and wealth management CEOs have been found to be confident or very confident about the growth outlook over the next 12 months, which is higher compared to the average of 86% across financial services sector, according to the study that surveyed 185 asset and wealth management CEOs from 45 countries.
Almost two thirds (64%) of the respondents said they are planning recruitment in the year ahead, which is higher compared to other financial services sectors.
The study found that two thirds of CEOs to be concerned about the speed of technological change as a threat to growth. 65% of the asset and wealth CEOs said they believe technology to reshape or significantly impact competition in the sector within five years, however only 10% of industry leaders said they plan to strengthen their digital capabilities.
In comparison, 77% of CEOs across financial services said they expect technology to reshape competition within five years and 23% plan to boost their digital capabilities.
Other concerns cited by wealth and asset management CEOs key were: skills (71%), changing customer behaviour (64%), lack of trust (61%) and cyber threats (59%).
Also, only 27% of CEOs said they are looking to collaborate with startups, thereby confirming their reluctance to innovate. In comparison, 31% of the banking CEOs and 37% of insurance leaders said they intend to do the same.
The study further unveiled a shift towards the US as a key market, with 54% of leaders citing it to be the most important market outside their home market compared to 39% last year.
PwC global asset and wealth management leader Barry Benjamin said: “Confidence is high, but the sector is showing signs of being slow to innovate and adapt – particularly to technology and demographics. There are likely to be more mergers, not only because firms are seeking distribution power and scale but also as some seek to break into new markets through buying talent.”