Oliver Wyman and Deutsche Bank Release New Wealth Management Report: Dare to be Different
27 4월 2018 - 5:50PM
Business Wire
- Wealth Managers showed strong
performance in 2017 with global financial wealth growing by 7
percent
- Efforts to diversify revenue streams
over the past decade will not provide a sufficient hedge against
revenue declines from a market downturn
- Wealth Managers should focus on:
defining differentiated value propositions based on their key
competencies, embracing data analytics to unlock revenue upside of
up to 20 percent, and adapting talent management to address
emerging skill gaps for nearly half of their employees
Oliver Wyman and Deutsche Bank today released a new Wealth
Management report titled “Dare to be Different”.
Kinner Lakhani, Head of European Financials Research at Deutsche
Bank, said: “Wealth Managers have capitalized on strong wealth
creation to drive positive operating jaws, despite ongoing
structural headwinds. However, the business model remains highly
cyclical, often underestimated by the market. As the cycle extends
further, this will increasingly come into focus.”
Kai Upadek, Head of Wealth Management at Oliver Wyman, said:
“Wealth Managers must act now to preserve their superior valuations
by focusing on more strategic and structural changes to their value
propositions and business models, both of which they have failed to
address in recent years.”
Wealth Managers showed strong results in 2017 with global
financial wealth growing by 7 percent, but tail risks continued to
grow. Net interest income tailwinds from recent USD rate hikes
provided some relief, but fee pressure remains high. Costs must
remain a top priority, with the industry delivering weak operating
jaws and while profitability remains highly sensitive to top-line
performance.
The equity market correction and volatility spike in February
2018 may be an early indicator for the approaching end of the
decade-long bull run in equity markets. Efforts to diversify
revenue streams over the past decade will not provide sufficient
protection against revenue declines in the next market downturn. In
the short-term, all revenue components are still highly correlated
to equity markets. Protecting mandate penetration is the single
most important driver for Wealth Managers to preserve their
economics in a market downturn.
The report identifies the following three priorities for Wealth
Managers:
- Focus on key competencies -
Differentiated value propositions and business models can achieve
up to double pre-tax margins. Wealth Managers need to stand out
through a differentiated and well-articulated value proposition by
focusing on key competencies. So far, the industry has mostly
followed the “broad waterfront” strategy of “offering everything,
everywhere to everyone.” This strategy can only be successful for a
select group of Wealth Managers who have the necessary scale to
orchestrate a complex geographic, client and product
footprint.
- Embrace data analytics to unlock
revenue upside of up to 20 percent - Data analytics has not yet
lived up to its potential. Wealth Managers need to overcome
challenges to realize the full revenue opportunity. They need to
build a foundation for advanced analytics either in-house or
embrace third-party solutions to close the capability gap. Wealth
Managers also need to embed data analytics into the organizational
culture and day-to-day business processes, most notably the advisor
desktop, to ensure acceptance by users.
- Adapting talent management to
address emerging skill gaps for nearly half of the employees -
Wealth Managers must treat the transformation of their workforce as
a top priority. Firms need to expand learning and training efforts
to upgrade existing employees’ skillsets, particularly related to
rising data analytics demands. Wealth Managers must sharpen the
talent value proposition to accommodate the preferences of new and
transforming talent pools. Firms will need to seek external
partnerships to tap into new talent pools beyond financial services
to access the required skillsets, i.e. a shift from nurturing
“farmer”-profiles to sales-driven “hunter”-profiles.
The entire report can be viewed online here.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With
offices in 50+ cities across nearly 30 countries, Oliver Wyman
combines deep industry knowledge with specialized expertise in
strategy, operations, risk management, and organization
transformation. The firm has more than 4,700 professionals around
the world who help clients optimize their business, improve their
operations and risk profile, and accelerate their organizational
performance to seize the most attractive opportunities. Oliver
Wyman is a wholly owned subsidiary of Marsh & McLennan
Companies [NYSE: MMC]. For more information, visit
www.oliverwyman.com. Follow Oliver Wyman on Twitter
@OliverWyman.
About Deutsche Bank
Deutsche Bank provides commercial and investment banking, retail
banking, transaction banking and asset and wealth management
products and services to corporations, governments, institutional
investors, small and medium-sized businesses, and private
individuals. Deutsche Bank is Germany’s leading bank, with a strong
position in Europe and a significant presence in the Americas and
Asia Pacific.
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Media:Oliver WymanFrancine Minadeo, +
212-345-6417francine.minadeo@oliverwyman.com
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