A wealth management business has the potential to grow up to twice the size of its parent by market cap, they said, making the industry very appealing. However, they added that banks and other wealth management companies must contend with disruptive pressures in four areas that are reshaping the market.
On one front, new client categories are being created by changes in demographics and the globalization of wealth. By 2030, 250 million customers who were born between 1981 and 2012—known as Generation Y and Generation Z—are projected to have a yearly income of above US$100,000. With 110 million and 90 million of the total respectively, the Americas and the Asia-Pacific region will dominate this wealth expansion.
The report also projected a rise in liquid assets of US$90 trillion from all investors worldwide between 2021 and 2030, of which US$40 trillion will come from people with holdings between US$100,000 and US$1 million. Asia-Pacific and the Americas will once more take the lead here.
Greater autonomy and self-education, it noted, tended to be hallmarks among emerging clients. Citing research firm Aite-Novarica, the report said almost 70% of households with a net worth of US$500,000 that were headed by a person under the age of 45 were strongly or largely self-directed investors in 2019, an increase from 57% in 2010.
Additionally, younger consumers choose digital interactions and channels more, though they prefer personal contact for difficult decisions, leading them to favour hybrid engagement approaches over human-only or digital-only strategies.
