“By 2027, 16% of existing asset and wealth management organizations will have been swallowed up or have fallen by the wayside.”

The 2023 PwC Global Asset and Wealth Management Survey suggests that Alpha is difficult, Beta is not enough, generative AI is for unstructured data and new geographies and Emerging markets will set the pace of growth. The report does not answer the following question. What about Alpha generation makes it difficult? Is it information? Is it mathematics? Is it because we need modern Science? Is AI expected to solve these problems? How is AI going to be implemented in the 50% passive of the total global AuM which is already transparent and low-cost??

Summary

“By 2027, 16% of existing asset and wealth management organizations will have been swallowed up or have fallen by the wayside.”

"Alpha will be more difficult to find"

"and the beta from rising markets may be challenged by money market funds and even bank deposits."

"Those towards passive investments as investors look for a transparent, liquid and low-cost option..."

"More than 90% of asset managers are already using these new technologies to enhance investment performance, but this is the area of investor expectation that they continue to find most challenging."

"We’re already seeing the impact of digital-first models and direct investment platforms catering to a younger demographic."

"Nearly 40% of institutional investors are planning to invest in custom indexing products in the coming 12 to 24 months."

"By 2027, we expect direct indexed AuM to have more than tripled to reach US$1.47 trillion, roughly 1% of total AuM"

"generative AI paving the way for closer analysis of unstructured data."

"Broaden your retail presence through AI and robo-advice as a way to offer the kinds of personalised solutions that would once have been reserved for HNW clients."

"The search for growth and yield is taking AWM organisations into new segments, geographies and asset classes, with all the expected results: additional complexity.."

"Asia-Pacific, along with frontier and emerging markets in Africa and the Middle East, will set the pace of growth in AuM."

"By learning more about your investors and developing the data and analytics to understand their needs, you can still deliver insight and value even when using third-party distributors."

"Booming segments of high-net-worth (HNW) and mass affluent investors are looking for more differentiated products."

"The dominance of the HNW segment is reflected in the fact that we expect their total assets to reach US$139.6 trillion by 2027"

"More than US$68 trillion could be passed on from baby boomers to millennials by 2030."

"growth potential includes active as well as passive ETFs."

"Nearly a quarter of institutional investors said they are considering investing in active ETFs in the next 12 to 24 months."

"The longer-term challenge is how to manage the complexities and reporting demands of these complex investments, which is likely to require specialist third-party support."

"Technology is revolutionising how you go to market and what customers expect."

"We’re already seeing the impact of digital-first models and direct investment platforms catering to a younger demographic."

"As investor expectations evolve, acquisition can also help to secure the capabilities needed to deliver the right experience and product mix."

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