Global Wealth Managers: Out of the pit stop – into the fast lane

Authors

Kinner Lakhani

kinner.lakhani@db.com

Kai Upadek

kai.upadek@db.com

www.dbresearch.com

research.db.com

Oliver Wyman and Deutsche Bank have today released their fourth annual wealth management report, titled “Out of the pit stop - into the fast lane”, in which they provide an overview of recent industry trends and the outlook for future developments.

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Wealth managers faced growing headwinds in 2018, with global high-net-worth wealth growth slowing to 4 percent. Lower AuM growth, more challenging markets and continued fee compression led to declining wealth management business valuations.

The revenue pressure felt by wealth managers in late 2018 highlights the continued vulnerability of operating models to market stress. The rebound in early 2019 brought short-term relief for some but further pressure is inevitable as the end of the cycle approaches – wealth managers must take action.

The report outlines two key priorities for Wealth Managers to consider:

Rethink footprint in emerging markets – wealth managers need to rethink their positioning across emerging markets, which will constitute over half of global wealth growth vs one third of stock today. Two key regions are of particular relevance: APAC and Latin America (LatAm). For APAC, one of the key priorities will be to assess entry into mainland China. In LatAm, wealth managers need to focus on solving operational, technical and regulatory challenges to provide a seamless onshore and offshore experience for clients.
Simplify the operating model – wealth managers need to demonstrate their ability to prepare their operating models for an approaching downturn by simplifying their front-office operations and by taking the wheel in tackling allocated costs, which remain stubbornly high.

The full report is available to clients of Deutsche Bank Research.

For important disclosure information please see: https://research.db.com/Research/Disclosures/Disclaimer

The above information does not constitute the provision of investment, legal or tax advice. Any views expressed reflect the current views of the author, which do not necessarily correspond to the opinions of Deutsche Bank AG or its affiliates. Opinions expressed may change without notice. Opinions expressed may differ from views set out in other documents, including research, published by Deutsche Bank. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made. In Germany this information is approved and/or communicated by Deutsche Bank AG Frankfurt, licensed to carry on banking business and to provide financial services under the supervision of the European Central Bank (ECB) and the German Federal Financial Supervisory Authority (BaFin). In the United Kingdom this information is approved and/or communicated by Deutsche Bank AG, London Branch, a member of the London Stock Exchange, authorized by UK’s Prudential Regulation Authority (PRA) and subject to limited regulation by the UK’s Financial Conduct Authority (FCA) (under number 150018) and by the PRA. This information is distributed in Hong Kong by Deutsche Bank AG, Hong Kong Branch, in Korea by Deutsche Securities Korea Co. and in Singapore by Deutsche Bank AG, Singapore Branch. In Japan this information is approved and/or distributed by Deutsche Securities Inc. In Australia, retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product referred to in this report and consider the PDS before making any decision about whether to acquire the product.

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