What Are the Challenges Facing Wealth Managers?

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June 9 (Bloomberg) -- The Boston Consulting Group Principal Anna Zakrzewski discusses wealth in developing economies on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

This is the 14th annual study of the global wealth management industry, coming on the heels of 2013, by most measures solid for the industry.

What were some of your key findings?

I guess some of them are that global wealth grew by roughly 15% up to $152 show you, one of the strongest we have experienced.

At the same time, asia has one of the biggest drivers of growth , which has been white a big shift between new wealth creation as well as the strong growth of equity not -- equity markets on existing wealth.

Equity markets and the creation of new wealth in what is described as rapidly developing economies.

How did that help to drive the growth we are seeing in global private financial wealth?

Asia, for example, was the main engine behind that.

If you look forward, we expect china, for example, one of the main economies in there, to become number two in the region by 2018, closing the gap to the u.s.. what is the u.s.? today the u.s. is the largest wealth market, with over $50 trillion, 30% of total global wealth.

As i mentioned before, china in five years time will be the second largest economy, just after the usa, slightly closing the gap.

What other regions are showing the most potential for growth going forward?

I would say latin america, asia, and eastern europe.

They have a potential growth rate of over 10% over the next five years.

What does that tell us about how these regions have responded to the global economic downturn?

A couple of years removed from the recession, our people now investing there?

I would say that they are back on their heels, but at the same time they have strong gdp growth in the regions where the new wealth is being created.

Offshore wealth is impacted by political and financial stability, rising and falling due to a lot of unforeseen geopolitical circumstances.

Private wealth, where is it being booked?

How is it being affected by be patriot nation efforts and by the efforts of some countries to try to get taxes from people they say are innovating paying them?

Offshore is the new challenge, yes?

But it is not dead.

I would say a lot of the banks are undergoing transformation.

We do see repatriation in the old world, like in europe and north america.

But there is also continued inflow.

We have big inflow that we see from italy, with its highest share of offshore wealth in asia and eastern europe.

And according to our graphics, switzerland is still number one for offshore.

Correct, switzerland is the largest, but if you take singapore and hong kong together it may overtake switzerland in the next five years.

Speaking with anna, zurich-based global wealth reporter for 2014. your report look so what is called the digital dilemma.

What is it?

Does technology give some an unfair advantage?

On one side it is a dilemma, on the other it is about the industry.

What we are talking about in digital is not the next online bank on the market, but it is really a new way of enhancing the experience between the relationship manager and clients . it really is an integrated, multichannel experience.

How has it changed the playing field?

In such a way that it will enable relationship managers to provide on hand advice to the clients, allowing for networks around the valley to improve their experiences.

We are now and -- no doubt going to see challenges going forward for wealth managers.

What are the challenges?

How can they gain market share over the next few years?

They have had a lot of challenges, but we can still call it a profitable business model.

So, banks today on average make 20% profit margin compared to other industry sectors.

It is a good business to be in.

The challenges they are facing are from my early around the topic of complexity.

The credo at the moment is to do a few things and do them well and at the same time start investing into basically career value propositions.

Complexity basically means that a lot of the play up is in outside markets offering those segments what is really about having a very clear approach, the segments and the markets, moving from profitability to pure growth.

One of the authors of the

This text has been automatically generated. It may not be 100% accurate.


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