10 Disruptive trends in wealth management

Perspectives

10 Disruptive trends in wealth management

An industry in change

Executive summary

The global Wealth Management and Private Banking industry continues to experience significant challenges and transformation. The industry is progressively adapting to the impact of tax transparency, increased competition and client demands and other realities which followed the financial crisis. Today however, new challenges and opportunities are emerging which players should anticipate in order to position themselves for success.

In this report, we outline ten disruptive trends which we expect to change global industry standards in terms of how advice and investment services are delivered to the new generation of clients. These changes revolve around three main themes of evolving investor needs, digital transformation and the increasingly complex market environment:

  • A generational shift is under way, and the needs and preferences of clients are evolving towards a simpler and more engaging experience. Investors are looking for a holistic advisory solution that encompasses their needs across a wide range of products, services and multi-jurisdictions.
  • Following other industries, the Wealth Management and Private Banking industries are now experiencing in-depth digitalisation, with no turning back in sight. The recent introduction of robo-advice platforms and the use of big data and analytics weigh in favour of further transformation.
  • Finally, the market environment has become increasingly complex to operate in. Competition has intensified with the market entry of specialised players. Additional investments and costs related to the introduction of new regulations does little to alleviate the continued pressure on profit margins.

These global trends are particularly relevant for Luxembourg players, where the industry’s development lies even more than elsewhere on internationalisation and adaptation to these new standards. The first players to take on these challenges successfully will surely secure their position for the years to come.

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