A new PwC report revealed that wealth managers are struggling with the challenges posed by the economic environment and continuing regulatory pressures.
According to a release, PwC's report, Navigating to tomorrow: serving clients and creating value, includes findings from PwC's 2013 20th anniversary
Despite the resurgence of global wealth to nearly pre-2008 levels, the industry is facing significant margin pressure caused by increasingly stringent and costly regulatory requirements, uneven growth across geographic markets, loss of certain type of fees and subdued client activity. These dynamics are further compounded by shifting demographics and existing challenges around operations, technology, and talent management. Surviving and succeeding in this environment requires changing to a more consultative business model that places a premium on "doing the right thing," says PwC.
Overall key findings include:
-Compliance replaced reputation as the top risk management concern, as wealth management firms struggle to keep pace with the scale, speed and costs of current and planned regulatory change.
-Infrastructure transformation will redefine how wealth managers serve clients.
-The cost of complying with regulation will continue to rise, with respondents forecasting that risk and regulatory compliance expenses will account for seven percent of annual revenue in two years, up from five percent today. Significantly, participants from the
-Attracting and developing quality client relationship manager (CRM) talent has become a critical priority for the wealth management industry.
Key findings for the
-Cost to income ratios are significantly lower for the
The report, which surveyed 200 institutions from more than 50 countries, found that the wealth management industry is at an inflection point, precipitated by continuing regulatory pressure, a challenging macro-economic environment, margin compression, changing demographics and trust challenges.
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