While the economy seems to be still picking up, the UK wealth management industry continues to pull off deals by investing in companies. So far, the going is good for the industry as more and more investors as well as other key players in the niche are showing great interest in its performance over the years.
Business for wealth managers is also on the increase as individuals who are securing their financial future turn to them for advice and their service. For their part, they must access and deliver to their clients an outstanding performance so that any agreement made between client and manager will cover all risks that both parties agreed to.
Investment managers have a role to play in helping investors to find reasonable securities that they can invest in based on market performance and this function makes the role of wealth managers more superior. Wealth managers take on the responsibility of managing investors’ porfolios and provide relevant advice as to which assets to set their eyes on as well as buy. However, the objectives of wealth managers go far beyond just helping investment managers to find lucrative assets to own. Wealth managers make it their job to generate steady income through human investment plus any financial and physical assets they may see of value.
UK Wealth Management Industry Consolidation
Today in the UK, smaller firms in the advisory sector are being taken over by consolidators thus causing consolidation to be on the increase. In fact, just last week, Tilney Bestinvest bought Towry for a whopping 600 million pounds. Fast consolidation however, is pushing out some small players and entrepreneurs. In 2013, a bank in Sweden known as Handelsbanken reportedly bought out Heartwood, another wealth management company. Permira, which is a private equity holding company, bought out Bestinvest, a client group that is privately owned in the UK and then went on to own in that same year stock-dealing company Tilney.
According to a top analyst at Numis, David McCann, “The addressable market for these businesses is around 1.1 trillion pounds-plus, implying that every 11 billion pounds in assets under management equals a market share of about 1 per cent.” McCann went on to say, “This shows that even the largest businesses still have pretty small market shares, and implies a very large tail of small businesses.”
Consultancies carried out by wealth management firms soared in 2015 from 83 to 124. Clients today in the UK are trusting wealth mangers with their wealth because those managers deliver a high degree of service. In addition, since managers put out their all to deliver great customer service as well as knowing how to find good investment routes, earnings and revenues are climbing, thus, profiting investors. Today, consumers who used to find it difficult to afford wealth managers’ consultancy fees are finding it easier on their pockets because fees are lowering across the country.
So far, the UK wealth management industry is worth a strong 1.8 trillion pounds and is set to be worth far more in the coming years. Wealth management growth is being driven by escalating real estate prices in the country, new pension rules that give people more freedom and an easier access to any long-term savings they have accumulated as well as a thriving growth in entrepreneurial business expansions.
Top Areas for Wealth Management
During the rest of 2016 and beyond, experts are predicting that important top issues that will dominate wealth management interest are government, technology, and demographics. Some customers who benefited from managers’ advice will be shifting their focus and financial assets over to them to manage on their behalf. Therefore, most niche offerings are ending up into the hands of traditional asset and wealth management companies. This makes many experts think that in the future banks, insurance companies, and other large entities will be stepping up services by offering automated, digital, and low-touch advisory consultancy.
Meanwhile, the younger investor generation coming up will start creating plenty of opportunities for wealth managers to thrive. These younger investors will eventually challenge and stretch the managers to come up with innovation techniques that could push the industry into a higher growth mode. Boomers therefore are expected to open large nunbers of new trusts while those already getting help from wealth managers will depend on them more for higher structuring of their valuable portfolios. With this in mind, wealth advisors that have a large influx of boomers will benefit from their business and thus trigger growth for themselves as well as the industry.
Another type of innovation the wealth management industry will be utilizing during the rest of 2016 and beyond is the use of analytics. This move by the industry will take into consideration the support of business ventures and a far better experience in customer engagement. Thus, the industry has begun to make strides in committing larger sums of monies in the hope that they will tap into advanced analytics and big data capabilities that will better help to serve their purpose.
Customer Service Key To Growth
Still, with advanced steps being taken by wealth management services to serve consumers better, people are still facing financial challenges they would like to overcome. If wealth management firms recognize the difficulties some consumers in the market are facing, they can take steps to meet the demands they see facing those consumers.
So what are the strategies wealth management firms need to embark on to better help consumers? Some ways in which financial managers can better serve consumers is for them to embrace change, start turning to more innovation skills. They can use investor demographics to help their customer base grow, and build stronger and new capabilities that will make them stand out from the competition.
As opportunities continue to beef up for the wealth management market, the market must get ready to make way for greater growth. As long as the industry can meet the demands of consumers, they will continue growing; however, if they do not meet those demands then the industry stands a chance of failing. As long as wealth managers keep living up to their standard, other sectors will have a problem keeping up with this industry.