Independent Wealth Management in Luxembourg
Perspective on a sector at crossroads
Deloitte and the Association Luxembourgeoise des Professionnels du Patrimoine (“ALPP”) are pleased to present you the results of our recent study, providing a perspective on the Luxembourg external asset managers (EAMs) sector and underlying trends. In this publication, we look at the evolution and growth of Luxembourg EAMs and financial performance as well as key business and regulatory shifts impacting the sector.
As independent players in the Luxembourg wealth management landscape, EAMs are very diverse and the sector is more complex than the traditional private banking industry in several respects. EAMs typically take a differentiated approach to client relationship management, and a more independent approach to wealth management. In this context, this paper aims to shed light on how the EAM sector has fared in the face of current ongoing changes in the wealth management industry, such as the emergence of new technology, regulatory changes and the introduction of tax transparency.
Beyond this, we look at the contribution of the EAM sector to the Luxembourg economy, in terms of both direct financial contribution and employment, as well as its indirect contribution to the depositary banking sector, stressing how strategic EAMs are for the Luxembourg financial sector.
Some of the trends highlighted in this study are clear challenges for the sector, such as the changes taking place in the wake of MiFID II. The odds are high that conditions for the EAM sector will remain challenging in 2018 and beyond. Nevertheless, we also highlight the success factors that in our view will allow EAMs to thrive in the future.
There are a number of important acknowledgements to make in relation to this study. We would like to thank the CSSF and ABBL for providing underlying EAM sector data. We would also like to thank the individual asset managers and banking institutions who have contributed expertise and insight in support of the study.