Major change ahead for wealth managers

Major change ahead for wealth managers

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The vast majority (90%) of European wealth management senior executives expect consolidation at a time when half of all European wealth is expected to change hands, according to a joint report by JPMorgan Asset Management and Oliver Wyman.

Most (85%) expect that larger players will acquire smaller players and 73% expecting some form of consolidation.

“The next generation of clients is emerging as wealth is created in new industries and a peak transition of wealth to a younger generation occurs over the next 20-30 years,” said the report.

The survey showed a number of challenges on the horizon for the wealth management industry.

“With the unprecedented industry change underway, the traditional wealth manager proposition is coming under strain. A clear understanding of the forces at play, a focused strategy and efficient execution will separate the future winners from the losers,” said Stefan Jaecklin, partner and head of the wealth and asset management practice at Oliver Wyman.

Digital innovation will provide opportunities to better engage and service clients, but will also enable innovative players to disrupt the market. A regulatory focus on client protection and stability of the financial system is creating numerous challenges for wealth managers, but is also opening up opportunities for differentiation

Demand for full tax transparency (in response to OECD rules and automatic data exchange, for example) is transforming the offshore banking model.

The survey included responses from 23 wealth managers across Europe, as well as an online survey of an additional 136 industry professionals.

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