The wealth management industry needs to adopt a renewed strategic focus on organic growth amid a reliance on ‘external levers’, according to Boston Consulting Group (BCG).

Its Global Wealth Report 2025 showed that while wealth management firms’ AUM rose by 13 per cent in 2024, faster than overall financial wealth (8.1 per cent), revenue growth “lagged” at 7.1 per cent, as many firms saw falling margins amid a changing rate environment.

Renewed focus

Analysis from BCG showed that just 28 per cent of wealth management asset growth over the past decade came from existing advisers, falling to 22 per cent in mature markets.

BCG noted that firms had leaned heavily on external levers, such as mergers and acquisitions (M&A), market performance, and adviser recruitment, all of which it warned could no longer be relied upon to increase revenue.

“What defines winners today is no longer exposure to market performance or the ability to poach senior bankers, but their ability to grow from within,” commented BCG managing director and partner, Michael Kahlich.

“Firms that deliberately invest in adviser enablement, brand identity, and next-gen client strategies are outperforming peers - not just in revenue, but also in valuation multiples.”

To elevate organic growth engines, BCG highlighted four levers for firms to use: brand differentiation, gen AI-driven client acquisition, data-driven recommendation systems, and next-gen client engagement.

“The rules of the game are shifting,” said BCG managing director and senior partner, Daniel Kessler.

“Firms that embrace AI-enabled prospecting, personalised onboarding, and digital tools that boost productivity will be the ones to capture the next wave of growth.

“Wealth is being created globally, but the challenge for wealth managers will be to capture it.”

Financial wealth

Global financial wealth increased to a record $305trn in 2024, driven by an 8.1 per cent rise in financial assets due to strong equity market performance.

Meanwhile, global cross-border wealth grew by 8.7 per cent to $14.4trn last year, exceeding the prior four-year average annual growth rate of 6.3 per cent, as demand for geographical diversification and safe havens increased.

In the UK, $637bn (7.23 per cent) of financial wealth was held cross-border last year, higher than the regional average of 6.12 per cent, with growth expected to be at 3.1 per cent.

While financial wealth in the UK fell by 2.7 per cent a year from 2019 to 2023 to $8.8trn, growth returned in 2024, albeit at 1.2 per cent, driven by modest equity market performance and relatively flat bond markets, as well as declining pension assets.

The UK represented 15 per cent of western Europe’s financial wealth in 2024.

“Despite global financial wealth hitting record highs, the UK saw only a modest increase last year, following a notable decline over the past five years,” stated BCG managing director and partner, Dean Frankle.

“As the market stabilises, there’s now a critical opportunity for wealth managers to rethink organic growth strategies.

“Over the last 10 years, they only achieved 28 per cent of their AuM expansion from net new money brought in by existing advisers, with the rest driven by market effects, M&A and adviser hiring.

“Going forward, we believe in a larger emphasis on organic capabilities such as AI-supported lead generation and advisor tooling, digital client engagement, and data-driven advice.”

Universal banks outpaced pure-plays in organic growth, generating 32 per cent of their AUM growth from existing advisers, more than double that of pure-play firms (15 per cent), as they benefited from structural advantage in lead generation, according to BCG.

Firms were found to have started deploying gen AI for prospecting, with some early movers reporting a fivefold increase in lead generation and a doubling of conversion rates.

Those integrating data-driven client retention systems experienced up to 15 per cent increases in product revenue and 20-30 per cent boosts in productivity.

BCG highlighted that Asia-Pacific was poised to lead wealth creation, with a projected financial wealth growth of 9 per cent compounded annual growth rate through 2029, outpacing Western Europe (5 per cent) and North America (4 per cent).

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