LONDON, July 27, 2017 – The wealth management industry is at a crossroads, as firms compare the costs of changing their business models and IT infrastructure against the risks of remaining stagnant according to a new research report sponsored by the SEI Wealth PlatformSM.
The study, “U.K. Wealth Management at a Crossroads,” is based on extensive interviews with C-suite executives from 12 of the top 50 U.K. wealth management firms with more than £500bn of assets under management. The study reveals wealth managers are facing mounting pressure to provide a distinct proposition as they all vie for the same pot of money. Key findings from the study include:
- Firms are struggling to stand out as competition intensifies and legislation leads to complex client needs;
- Failing to invest in technology poses a major threat to wealth managers in a robo-advice world,
- The future of the industry will be driven by a move towards inorganic growth and consolidation, as well as outsourcing, as wealth managers seek to reverse margin compression.
The report also divulges how firms are seeking to overcome the threats facing the industry and their own firms. The majority of those interviewed see M&A playing a role in their growth strategies in order to achieve scale, as well as to help bring the industry into the 21st century. According to one CEO, “scale is important, especially when faced with pressure on fees or an identified need to invest in new technology. The bigger firms can withstand the buffeting.”
Commenting on the report Brett Williams, Managing Director, SEI Wealth Platform, U.K. Private Banking, said:
“Our latest research provides a snapshot of the challenges and opportunities facing wealth managers in 2017 and beyond. Firms are responding to the impact of change in different ways, and it is clear that many have important decisions to make when seeking to balance their business priorities in the months and years ahead.”
“Client expectations have evolved and increased so significantly, that firms need to adapt their business models in order to meet them, while at the same time keeping costs down and seizing opportunities for growth. If firms are able to control their cost bases, deliver high-quality products and services, and do so as efficiently as possible, then they have a fighting chance of sustaining a profitable business in an ever-changing environment.”
About the SEI Wealth Platform
The SEI Wealth Platform (the Platform) is an outsourcing solution for wealth managers encompassing wealth processing services and wealth management programs, combined with business process expertise. With the Platform, SEI provides wealth management organizations with the infrastructure, operations, and administrative support necessary to capitalize on their strategic objectives in a constantly shifting market. The SEI Wealth Platform supports trading and transactions on 149 stock exchanges in 55 countries and 41 currencies, through the use of straight-through processing and a single operating infrastructure environment.
SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of June 30, 2017, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers $809 billion in hedge, private equity, mutual fund and pooled or separately managed assets, including $307 billion in assets under management and $497 billion in client assets under administration.