The end of industry complacency: PwC 2023 Global Asset and Wealth Management Survey

Heathcote Investment Partners director Clayton Copplestone, agrees with the sentiment set out by PwC in its 2023 Global Asset and Wealth Management (AWM) survey. He says that by 2027, 16% of existing AWM firms may be out of the game.

The AWM industry has reaped the benefits of strong general direction for three decades, attracting a wealth of competitors. But with those directions fading, industry players must prove their value to survive. Copleston says that the era of "retailisation" has bred a new breed of value-aware consumers who won't pay for mediocrity.

Rising interest rates present another challenge. With New Zealand cash rates over 5.50% and set to climb, Copleston says term deposits are becoming the new rivals in asset management. AWM firms must prove their worth and justify their pay, marking the end of industry complacency.

Despite these challenges, the report predicts a rise in private markets revenues, accounting for half of global AWM revenues by 2027, a significant increase from 37.6% in 2020. But Copleston warns against getting lost in the product structure. What matters to consumers is a reasonable return for their risk.