Defining moment: Harnessing the immense power in your hands

With control of over $110 trillion in assets under management (AuM), the asset and wealth management (AWM) industry has the power to shape a better future for investors, shareholders, the economy and wider society. How can your business make the most of the potential?

If 2020 has taught us anything, it’s that the health and wellbeing of society and the fortunes of the economy are inexorably linked. We’ve seen the stark downsides as whole sectors have had to shut down and governments struggle to keep businesses afloat. But there can also be upsides and the AWM industry can play a key part in these.

As we explore in Asset and wealth management revolution: The power to shape the future, AWM is an industry that can now quite literally change the world. As AuM have grown, the AWM industry’s unparalleled influence stretches across three of the most critical priorities faced by societies and economies today:

• Funding the future: AWM firms can channel capital and target investment opportunities to lift economies out of recession and sustain superior fund returns.
• Providing for the future: By delivering risk-adjusted returns, firms can help people meet their savings goals and bridge pension gaps in the face of economic fragility, ultra-low interest rates and a squeeze on government health and welfare budgets.
• Embracing ESG as the future: For some investors, financial return will remain the sole priority. However, a growing number of investors expect AWM organisations to make environmental, social and governance (ESG) issues integral to their investment strategies. This shift is already having a revolutionary impact on product design, fund allocation and performance objectives.

Equipping your business

AWM organisations that deliver standout returns on both the social and financial fronts will be the clear winners over the coming decade — magnets for investment and able to sustain superior returns for shareholders and partners.

The big question is of course how to deliver. Our Asset and wealth management revolution: The power to shape the future report sets out the starting points for the strategic rethink needed to meet the funding the future, providing for the future and embracing ESG as the future priorities. We also look at how to repair what’s not working now, reconfigure your capabilities to pull ahead and the reporting needed to rebuild trust.

Defining moment

I believe that this is a defining moment for the industry. As an AWM organisation, aligning your strategy with changing stakeholder expectations offers a valuable opportunity to boost growth in AuM, secure new mandates and reposition your business within public perceptions.

To realise the potential, the changes to your business are likely to be fundamental, rather than marginal. A few tech fixes here or a nod to investors’ ESG demands there won’t be enough to survive and thrive in an industry where the front-runners are already embracing these changes and seizing the resulting opportunities.

So, I would thoroughly recommend exploring the perspectives on the future and projections for growth we set out in this report. I would also be very keen to hear your thoughts on how the industry can harness the power in its hands.

? 2021 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with a professional advisor.