Enhanced dynamics and emerging opportunities

Wealth Management Insights Report 2023

The wealth management industry is undergoing a substantial transformation. Our recent survey, carried out with over 150 wealth management experts, provides comprehensive coverage of the current landscape, with a particular emphasis on the challenges and opportunities presented by the proliferation of digital technology, online platforms and alternative assets. This report outlines strategies on how to overcome regulatory and security challenges and how to effectively position wealth managers in a competitive marketplace.

Amidst prevailing macroeconomic conditions, wealth managers and professionals have significant opportunities to explore. Digital technology has revolutionised the industry with online platforms and robo-advisors, making wealth management services more accessible, affordable and transparent in terms of products and pricing. In a rapidly-evolving financial landscape marked by economic, political and technological changes, wealth managers must navigate these shifts to align client portfolios with investment objectives.

Are you ready to adapt to the changing landscape and leverage technological advancements in wealth management?

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The Wealth Management puzzle:

Deep dive I: Distribution channels

Deep dive II: Net Zero Insights 2022

Deep Dive III: FinTech M&A in Germany, Switzerland and Austria

Deep dive IV: Customer tax journey

WM Insights 2022 Report

Deep Dive V: Under-engaged accounts

Deep dive VI: Hybrid wealth management

Key learnings

Economic outlook - Optimism amidst dynamic times

The wealth management industry is undergoing significant changes driven by the turbulence seen in the banking sector. Geopolitical shifts, inflation and rising interest rates have created a divide among wealth managers regarding the economic outlook for the next year. This divide is fuelled by uncertainty identified by wealth management experts. In response to the post-pandemic landscape, portfolio management strategies have been restructured to adapt to market conditions. There is a growing demand for advisory, succession planning, tax planning and financial planning services among UHNWIs, highlighting a focus on wealth preservation in a dynamic environment.

Private markets - Interest in private equity remains high

Private equity has emerged as a highly-coveted asset class among UHNWIs in the wealth management industry. Wealth managers are attracted to private equity due to its potential for superior and more favourable returns compared to other asset classes. However, its complexity and stringent requirements limit the number of wealth managers who offer it through their own resources. This highlights the significance of partnerships or acquisitions for wealth managers to incorporate private equity into their product portfolios and fulfill the growing demand.

Digital assets - Crypto winter is thawing

Despite a decline in demand recently from UHNWIs, the crypto market is recovering, with wealth management experts confident in the role of digital assets. The report focuses on trust and security in the digital asset domain due to declining investor trust caused by low-utility cryptocurrencies and illegitimate projects. Despite challenges such as regulatory uncertainty and security concerns, wealth managers recognise the benefits of crypto and tokenised assets, such as increased liquidity, accessibility, transparency and new investment opportunities. As this report demonstrates, industry players like Sygnum are actively working to create a trustworthy industry and unlock the full potential of blockchain use cases.

Generative AI – Disrupting wealth management

We explore the innovative financial tool called Bloomberg GPT, which is considered a significant disruptive force and which introduces fresh opportunities within the realm of wealth management. Bloomberg GPT, a specialised version of the GPT model tailored for the financial industry, has the potential to revolutionise the way wealth management operates. By leveraging its capabilities in analysing financial data and performing natural language processing tasks, Bloomberg GPT offers valuable insights and automation possibilities that can enhance decision-making and client services.

Digital readiness – Rising client demand for digital services

Over the next few years, wealth managers are expected to integrate new digital services in order to address changes in customer needs. These shifts are especially crucial in catering to younger investors who favour platform-based solutions. A notable proportion of wealth managers are actively pursuing the development of comprehensive digital offerings that go beyond robo-advisory. By incorporating them into digital wealth management, wealth managers can provide personalised advice, reduce costs, enhance transparency and improve accessibility. This integration streamlines processes, expands the reach to a wider client base, and when combined with AI capabilities it further enhances personalisation. If wealth managers wish to remain competitive in the industry, embracing digital technology is no longer an option but a necessity.