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Industry Spotlight > Advisors

What Wealth Managers Must Do to Outperform by 2030: EY Report

By Michael S. Fischer

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How to outperform in today’s wealth management industry is the existential question confronting its leaders, according to the 2024 EY Global Wealth Management Industry Report.

The report addresses how to win in terms of growth, profitability and sustainable competitive advantage by examining the industry’s evolution, the challenges it must overcome and how to go about doing so. 

Evolving Industry

According to the report, financial pressures on firms, structural changes in the industry, and uncertainty and ambiguity for clients are driving change in reshaping client relationships. Those are at the core of wealth management’s purpose — supporting and coaching wealthy clients in the accumulation, protection and responsible growth of their assets and managing their personal legacy for the benefit of future generations.

Clients are gaining relative power as they increasingly focus on performance, net value, experience and brand reputation. Digitization is transforming relationships in every wealth band, including a growing preference for self-direction among affluent clients.

Even so, wealth managers should remain rooted in their core purpose, EY said. It is crucial for them to appreciate that clients remain firm in their desire for a valuable, trusting relationship with their wealth manager. This is especially apparent when emotional stakes are in play alongside financial ones, at key moments such as market shocks or major life events.

Underlying Challenges

The report explores the underlying industry challenges that firms must address to outperform their competitors in value creation between now and 2030. The research identifies 10 underlying challenges and the questions that C-suite leaders should be asking:

Stand out in the age of personalization: How can we more systematically provide outstanding personalization and value to all of our clients?

Elevate relationship management: How do we take front-office productivity to the next level while building trust?

Deliver client-centric advice at scale: How can we provide each client with valuable, tailored advice?

Create synergies with modular offerings: How do we make our offering menus comprehensive, clear and appetizing?

Provide seamless, consistent experiences: How can we provide smooth, joined-up client journeys across channels?

Redefine the relationship manager: How can we foster greater productivity among our relationship managers?

Outperform on organic growth: How can we systematically increase conversion rates for client acquisition, add-on sales and retention?

Overcome complexity in operations: How can we achieve sustainable profitability gains, despite growing complexity?

Build future-proof technology and data infrastructure: What is our design for a powerful, efficient and adaptable technology and data architecture?

Redesign key control functions: How can we evolve toward modern, efficient risk management and compliance?

EY said these challenges are connected to one another, and wealth managers need to master as many of them as possible if they are to consistently outperform current peers and future competitors. Most wealth managers have a distance to go to achieve best practice in every one of these areas, EY said. 

Through gathered experience from cases across markets and disciplines, EY has identified industry-specific, objective-focused business and operating model concepts that firms can apply to effectively address industry challenges.

These include “advice-centered affluent banking,” “advisor co-pilot (virtual assistants),” “systemic client-centric sales,” “hybrid omnichannel client experience,” “front office unburdening” and “extending incentive models for front office.” 

Some of these have a proven track record but have been sidelined by a preference for tactical approaches. Others are more innovative. EY suggests that each one can be strategically valuable to any wealth manager, although their relevance will vary according to each firm’s distinct circumstances.

Michael S. Fischer

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