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Wipfli surveys show wealth management and asset management firms have “tempered optimism” amid evolving industry landscape

Tuesday, August 15, 2023

Wipfli has published the results of two industry surveys from the wealth management and asset management sectors that provide insights into current economic challenges and how organizations are positioning themselves for long-term market stability. Ongoing rate hikes, uncertain market performance, geopolitical tensions, and increased competition all contribute to overall cautious economic predictions in both the new State of the wealth management industry and State of the asset management industry reports.

“Our research indicates common themes uniting wealth management and asset management firms’ priorities,” said Anna Kooi, financial services and institutions industry practice leader at Wipfli. “Employee retention and recruitment, client engagement, and technology integration are all crucial for future success, and firms have to balance budget allocations and investments in each area appropriately.”

Both wealth management and asset management firms anticipate shifting economic times ahead, with 62% of wealth management firms and 72% of asset management firms expecting a U.S. recession in the next 12 months. Accordingly, most survey participants for each industry estimate conservative market growth of 5-8% over the next 12 months (55% wealth, 65% asset). Less than a third for both industries anticipate standard growth of 8-10%.

Recruiting top talent and implementing technology are key concerns for both industries. About two-thirds of both industries (66% wealth, 69% asset) list employee recruitment as one of their top concerns, and asset management firms note that talent management is their most important strategic focus. Also, asset management firms are ahead of the curve in recognizing how technology can assist and automate tasks for employees, while wealth management firms are also focused on new client acquisition and cultivation.

Technological integration is transforming how wealth management and asset management firms do business. In both industries, some firms are already using technology to support more efficient client onboarding and account management processes, as well as using data analytics to inform business decisions. Eighty-three percent of asset management firms are using business analytics to support data-driven decisions, and 58% of wealth management firms have increased their use of analytics in key business strategies.

The wealth management survey was based on responses from 102 wealth management firms across 28 states, and the asset management survey had 99 firms respond across 31 states.

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