Wealth and asset managers combining capability with clarity ‘pulling ahead’ of peers

Around one in 10 (11 per cent) wealth and asset management firms are “pulling ahead” of their competitors by combining execution capability with strategic clarity, according to a report from PwC.

In its outlook on the future of wealth and asset management, PwC argued that firms in this group were making clearer strategic choices and aligning their organisations behind them.

Building on its analysis that identified four ‘winning’ business model archetypes set to capture a significant share of the projected $230bn increase in industry revenues by 2030, PwC conducted a global survey of 264 asset and wealth managers and distributors.

It aimed to assess how firms were positioning themselves in an evolving landscape by using strategic, rather than financial, metrics as key indicators.

PwC evaluated firms across two dimensions: execution capability demonstrating high-potential performance, and strategic clarity through alignment to the four business model archetypes.

More than half (52 per cent) of wealth and asset managers demonstrated either strategic clarity or high-potential performance over the next five years.

Meanwhile, 11 per cent had combined both dimensions to position themselves as what PwC described as ‘future-fit’ wealth and asset managers that were aligning capital, talent, and technology behind a coherent model.

The report noted that many wealth and asset managers sat somewhere in between, with some having clarified their strategic direction but not having built the capabilities to support it, while others showed strong execution momentum without fully consolidating around a winning business model.

“The challenge for companies - and the big opportunity - is to align clarity and capability,” PwC stated.

“Together, the two dimensions of high-potential performance and clarity of business model provide a forward-looking view of how firms are positioning themselves as industry transformation accelerates.”

Almost a third (32 per cent) of respondents had aligned clearly to a ‘winning’ archetype but did not sit within the top tier of firms with high-potential performance.

Meanwhile, 9 per cent had demonstrated strong performance momentum but were not well aligned to a defined archetype, and 11 per cent had combined clear archetype alignment with high-potential performance.

The remaining 48 per cent had shown neither strong alignment to an archetype or momentum towards high-potential performance, with PwC warning that this group could steadily lose ground as a continued reliance on historic strengths may prove insufficient if investments in technology, data capability, and operating infrastructure fail to keep pace with their peers.

To improve readiness for the future, wealth and asset management firms were encouraged to determine their archetype; invest in the right human capital; gear up for continuous transformation; execute targeted mergers & acquisitions; and measure progress to drive results for their stakeholders.

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