There are expected to be 7.7 million more high-net-worth-individuals (HNWIs) in the world by 2023, according to a report by wealth data business, Wealth-X. This equates to $20.9trn of newly created wealth in the next five years, presenting a huge growth opportunity for the global wealth management industry.
As such, we’ve decided to compile a short list of interesting statistics on the global wealth management industry – taking into account the current state of the industry, future growth prospects and what HNWIs expect from their advisors.
We also take a look at how wealth management firms are using technology, and how they plan to do so in the future, considering aspects such as the use of AI and robo-advisors.
General facts
- The 32 biggest wealth managers in the world have a collective market share of just 50 per cent, making the industry one of the most fragmented in global finance – JP Morgan
- The global wealth management platform market is anticipated to garner USD 4 Bn, expanding at a noteworthy CAGR of 15% by the end of 2018-2023 – Market Research Future
- The global volume of net investable assets of high-net-worth individuals will increase by around 25% to almost US$70 trillion by 2021 – EY
- Residents of North America held nearly 43% of global personal wealth in 2017, followed by Western Europe with 22%. The strongest-growing region in 2017 was Asia, which posted a 19% increase. – The Boston Consulting Group
Asia in the lead
- The Asia Pacific asset and wealth management industry will grow faster than in other regions with assets under management (AUM) expected to almost double to US$29.6trn in 2025 from US$15.1trn in 2017 – PwC
- China has witnessed the emergence of large third-party online wealth management platforms, such as Lufax and Ant Financial
- The combined AuM of these platforms has risen at a CAGR of 50% over the past five years. – The Boston Consulting Group
- UBS is the top wealth manager in Asia, with US$383bn AUM, followed by Citi at US$256bn and Credit Suisse at US$202bn. – JP Morgan
Advisors and their clients
- Personal financial wealth could rise at a CAGR of about 7% from 2017 to 2022 – The Boston Consulting Group
- 64% of wealth managers agree that intergenerational wealth transfers will be a big source of new business in the coming years. – Global Data
- The use of independent financial advisors is expected to rise rapidly, with an 18% increase in clients globally who expect to use independent advisors in the next three years, and a 14% increase for independent advisory firms – EY
- HNWIs, globally, pay an average of US$65,795 in annual fees, which amounts to 8.4% of all assets under management – Capgemini
- 45% of clients do not trust their wealth manager or advisor to charge them fairly. – EY
- Wealth managers can achieve a revenue uplift of from 8% to 12% by adjusting price levels, correcting unnecessary discounts and simplifying overall pricing structures. – The Boston Consulting Group
- Over 70% of wealth management clients see highly personalised service as a key factor in deciding whether to stay with their current provider or switch to another. – The Boston Consulting Group
Tech and AI
- 34% of wealth managers currently use AI within their firms, but 99% said that that they plan to deploy AI within the next three years. – Forbes Insights and Temenos
- Automated advisors utilizing AI are expected to have assets worth US$2.2 trillion by 2020 – Capgemini
- 53.7% of global wealth management firms have hybrid advice programmes underway, but none has a fully implemented solution – World Wealth Report, Capgemini
- Leveraging advanced analytics and data can reduce client attrition in the wealth management industry by 10% to 20%. – The Boston Consulting Group
- Holistic wealth management will emerge as a new kind of digitalised business model
- Holistic wealth managers are expected to gain a market share of 30% by 2025. – EY
- Robotic process automation could cut costs for financial services firms by up to 75% – KPMG
- According to a report released in September 2016, cybersecurity is a high priority for 81% of advisors, but only 29% are fully prepared to manage and mitigate the risks associated with cybersecurity. – FPA Research and Practice Institute
