PwC's Wealth Management Insights 2024
Adaptive strategies
in a dynamic world
The third edition of our Wealth Management Insights report shows how the market is navigating a time of cautious optimism. According to our survey, which includes PwC partners across the globe and external experts, ongoing geopolitical conflicts, pivotal elections worldwide (notably in the US) and an unpredictable interest rate environment are factors contributing to the biggest concerns for the coming months. Despite this, over 56% of participants in our survey share this sentiment of cautious optimism.
Insights from an unpredictable interest rate landscape
At the time of writing, wealth management is at a pivotal point, with the future of interest rates remaining unclear and managers needing to be agile and proactive.
The gap between the risk premium and risk-free rate calls for new strategies, as high interest rates recalibrate the cost of borrowing, potentially escalating the volatility and beta of investment portfolios.
Most relevant drivers influencing clients’ investment decisions
There is a very clear risk of a slowing economy, highlighted by the current inverted yield curve. This situation is pushing wealth managers towards alternative investments.
On a different note, our survey indicates that the US, followed Central & Western Europe and by Asia-Pacific (excluding Chinese mainland), are the three key regions where growth is expected.
Furthermore, with 65% of respondents, the survey indicates that private market investments have become attractive for their potential to balance shortterm market volatility with a long-term approach. Even so, because of their exclusivity and traditional lack of liquidity, these investments are being challenged by new business and distribution models that open up opportunities to more investors. It’s interesting to consider how wealth managers will navigate the change in distributing these assets.
Markets driving future growth in client portfolios
Emerging technologies as catalysts for change
As noted in PwC’s Asset & Wealth Management Revolution 2023: The New Context, the popularity of ETFs continues to grow. ETFs are adapting to different asset classes and innovating with vehicles like the Bitcoin ETF, a newly popular product despite the high risk and pronounced volatility involved. New crypto-related ETFs are expected to be authorised and launched soon, confirming the “new context” trend connected with digital assets.
Emerging technologies are also contributing to the industry’s cautious optimism. In particular, the use of generative AI in wealth management will significantly enhance efficiency and decision-making, impacting profitability positively.
PwC’s Wealth Management Insights 2024
Adaptive strategies in a dynamic world
Navigating the different chapters
Chapter 1 will dissect the new financial landscape, analysing the economic indicators and their effects on credit affordability and examining shifts in demand for lending products.
Chapter 2 will delve into the transformative effects of AI and automation on wealth management services, examining how these are changing client relationships and service standards.
Finally, Chapter 3 will address strategic alignment in the industry, looking at the way new service models will support managers in navigating complex times calling for an examination of compensation models and bank strategies. This year’s report is designed to provide insights and guidance for wealth managers in an era marked by change and opportunity.
