The Decline in Global Assets Under Management
The global asset and wealth management industry is experiencing its greatest decline in a decade, according to PwC’s 2023 Global Asset and Wealth Management Survey. The survey reveals that global assets under management (AUM) decreased by 10% last year, falling from a high of $127.5 trillion in 2021 to $115.1 trillion. This decline can be attributed to several factors, including inflation, market volatility, and rising interest rates in the post-Covid period.
The decline in AUM has raised concerns among investors, leading asset and wealth managers to consider strategic consolidation and technology adoption.
The Need for Strategic Consolidation
In light of the challenging market conditions, 73% of the asset managers surveyed by PwC are considering strategic consolidation with another asset manager. This move aims to gain market share and mitigate risks associated with the changing landscape. The survey highlights the importance of leveraging technology to enhance investment performance.
Embracing Technology for Growth
Over 90% of the surveyed asset managers are already exploring the use of technology, including AI, big data, and blockchain, to improve their investment strategies. The integration of these technologies can help asset managers adapt to the new context and deliver exceptional client experiences.
The Path to Thriving
Olwyn Alexander, global asset and wealth management leader at PwC Ireland, emphasizes the need for adaptation and leveraging technology. Firms that effectively utilize technologies like generative AI and robo-advisors, establish strong connections with customers, diversify their recruitment strategies, and prioritize client experiences will not only survive but also thrive in the evolving industry.
Hope for the Future
Despite the current challenges, PwC predicts that global AUM will rebound and reach $147.3 trillion by 2027. This hopeful outlook highlights the potential for recovery and growth in the asset and wealth management industry.
