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June 18, 2020updated 28 Jun 2020 7:59pm

Four in five wealth managers don’t plan to transform

By Patrick Brusnahan

Nearly four in five (78%) wealth managers in Europe and Asia do not plan significant changes to their business models.

This is despite growing external threats, such as losses from intergenerational wealth transfers.

Research from Accenture and Orbium shows the latest threats and adapting mentalities for wealth managers and their business models.

The report showed that wealth managers expect to lose nearly one-third (32%) of their clients wealth through intergenerational wealth transfers. This is approximately $40trn over the next 30 years.

In addition, wealth managers want to improve talent, but 40% admitted to having difficulty adopting a strong culture for change.

Only 17% of wealth managers surveyed expected traditional approaches to client segmentation to remain relevant in five years. They believed that the market will likely move to a “segment of one” model to reflect individuality.

53% of respondents thought that personalisation will be driven by traditional investment needs and evolving client choices.

The survey was undertaken before Covid-19 but views were still bleak. In Europe and Asia, 70% of wealth managers expected the economic outlook to deteriorate and 55% expected volatility to increase in the near-term.

“Wealth managers must ensure that their advisory models are ‘fit for future,’ as the one-size-fits-all approach to client servicing no longer works,” said Ian Woodhouse, head of strategy and change at Orbium, part of Accenture Wealth Management.

“A younger generation of socially active clients is demanding new products and ways to be served, including timely, multichannel interactions. This level of client engagement will require significant investments in technology around data and analytics so that wealth managers can restructure their business models to enable advisers to deliver personalised advice at scale.”

“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,” said Michael Spellacy, a senior managing director at Accenture and global capital markets industry lead.

“Their resiliency is certain to be tested, so they must overcome organisational inertia to reinvent the client experience and products for future generations. The leaders will make customised digital interactions more personal, with wealth advisers supported by artificial intelligence, automation and analytics to make better, faster decisions for clients.”

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