[Universidade Federal do Rio de Janeiro - UFRJ] [Escola de Química - UFRJ]

Global Wealth 2015: Winning the Growth Game

The wealth management industry has arrived at an inflection point. While one group of players seems to be guarding the status quo, another group is seizing the moment. These proactive institutions are doing more than their competitors to raise their game in ways that will ensure profitability and market-leading positions over the next five years and beyond.

Given the current market dynamics, we have placed special emphasis in this year’s Global Wealth report on what the most successful players in today’s wealth-management industry are doing right. Using data gathered from benchmarking studies carried out over the past three years, we have identified those organizations whose performance has consistently surpassed that of their peers. For example, although robust asset performance drove growth for most players in 2014, some institutions were able to gain higher revenues per relationship manager, acquire greater amounts of new assets, and achieve leading revenue and cost margins. What drives such significant differences?

On the basis of both our benchmarking and our extensive experience working with wealth managers globally, we have observed five common characteristics that winning organizations possess, which we will discuss in detail:

  • Segment-specific value propositions and coverage models
  • Rigorous price realization in target client segments
  • A differentiated advisory offering
  • A focus on front-office excellence
  • The ability to measure and manage profitability

This year’s report also contains some of our traditional features—particularly a comprehensive, global market-sizing that includes regional breakdowns—and for the first time pays special attention to the investments that wealth managers are making in their own businesses in their quest to achieve excellence and stay ahead of their rivals. Are most institutions focusing on strengthening existing businesses—or on discovering new horizons to explore? Are they more concerned with the next 12 months or the next two to five years? The answers to such questions will help determine who the winners will be in the run-up to 2020.

Overall, the journey to achieving consistent success remains a difficult one. The traditional challenges are still there: how to attract new assets, generate new revenues, manage costs, maximize IT capabilities, find investment strategies that foster client loyalty, and navigate a complex and ever-evolving regulatory environment. There are many fresh challenges as well, including raising digital capabilities and coping with potentially disruptive new business models. There are no easy solutions, but successful, proactive players are finding the right balance.

Our goal in Winning the Growth Game: Global Wealth 2015, which is The Boston Consulting Group’s fifteenth annual report on the global wealth-management industry, is to present a clear and complete portrait of the business, as well as to offer thought-provoking analysis of issues that will affect all types of players as they pursue their growth and profitability ambitions in the years to come.

Source: BCG Perspectives