Chief executives optimistic about growth but fear looming disruption

The chief executives of global asset and wealth management firms are confident about growth prospects but believe that regulation, technology and changing consumer behaviour are ushering in a period of disruption.

That’s the main conclusion of PwC’s 21th Global Survey of chief executives expectations for the year ahead published this week.

The report found that:

    •  87% of chief executives in the asset and wealth management industry are confident about revenue growth in 2018 – slightly lower than in 2017 when 92% were this optimistic.

    •  The three biggest concerns for the industry are over-regulation (83%), geopolitical uncertainty (80%) and tax changes (77%).

    •  While 70% of chief executives in the industry believe changes in core technologies will prove ‘disruptive or very disruptive’ over the next five years, just 38% believe that robotics and artificial intelligence can improve the consumer experience.

    •  Almost three quarters (73%) of those surveyed are ‘somewhat or extremely concerned’ about cyber security threats.               

PwC believes that, while assets under management (AuM) globally will be buoyed by rising asset prices and will double by 2025 – from US$84.9 trillion (€68 trillion) in 2016 to US$145.4 trillion in 2025 – major changes to fees, products, distribution, regulation, technology and people skills, mean it won’t be business as usual in the years to come.

Elizabeth Stone, UK asset and wealth management leader at PwC, said: “London truly is a global centre for investment management and, with just over a year to go until the UK leaves the European Union, Brexit will undoubtedly be one of the top disruptors for the industry in the year ahead.

“Whilst the asset and wealth management industry hopes to have more clarity on transition by the end of this month, in our view, firms need to continue planning for a ‘hard Brexit’ and accelerate their focus on moving from planning to implementation.”

©2018 funds europe

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