According to the latest study, PwC’s Global Asset and Wealth Management Survey 2023, projections for 2027 reveal how changing investor expectations will disrupt the status quo. For industry players, the choice is simple – adapt to the new context or fail.
Faced with these challenges, leaders must focus on how they can successfully adapt to thrive in the sector’s changing landscape, and 5 key ideas for continuity and success have been identified:
1. Overcome once-in-a-career disruptions
Inflation, market volatility and interest rate movements are by far the biggest concerns for investors and asset managers over the next 12 to 24 months. Outperforming the market, and even outperforming low-risk deposits and money market funds, will be a challenge in this demanding, post-Covid environment.
2. Getting closer to the customer
The opening up of private markets and changes in the allocation of investments – including greater demand for exchange-traded funds – are transforming the competitive landscape and the frontiers of growth, in a context of wealth transfer of 68 trillion dollars from baby boomers to millennials by 2030.
3. Embrace experimentation and change
Almost 90% of institutional investors surveyed by PWC believe that the use of disruptive technologies (including big data, AI and blockchain) will lead to better results and returns for their portfolios. But despite widespread investment and implementation of these technologies, this is the area of investor expectations that asset managers continue to find most difficult.
4. Delivering results at scale in a context of competitive and cost pressures
With the acceleration of concentration in the sector, PWC predicts that the ten largest asset managers will control around half of investment fund assets worldwide by 2027. Alongside their increasingly important role in financing and influencing the real economy, some asset managers may even consider a more holistic approach to financial well-being, with banking and insurance solutions obtained through mergers and acquisitions (M&A), joint ventures or alliances.
5. Facing increased scrutiny
Sixty percent of asset managers believe that environmental, social and governance (ESG) skills will be essential for their portfolio management team in today’s market – although finding the right talent is becoming increasingly difficult. In addition, the growing emphasis on the power of these entities over the economy raises fundamental questions about the purpose and relevance of these organizations.
Access the full report here: Asset and wealth management revolution 2023: The new context
