Wealth Management Trends and Themes in 2023
Summary
In this report, GlobalData's Wealth Management team consider the key trends and themes that will shape the global wealth industry over the course of 2023. These include ESG, rising inflation, the Russia/Ukraine conflict, and increased adoption of artificial intelligence.
Wealth management is in for another challenging year, which is set to dampen profits and result in many disgruntled clients. Looking at the top trends in the market, there are more challenges and threats than opportunities for growth. Geopolitical tensions, inflation, and the Crypto Winter are all headwinds for the industry. Despite these crisis management issues, wealth managers are still looking to build up capabilities in ESG, expand in key growth markets, unlock the benefits of more personalization, and integrate artificial intelligence within more areas of their business.
Scope
- ESG remains the top issue for wealth managers.
- Global wealth managers will increasingly jockey for position in China and India.
- ChatGPT will be see extensive use in the advice market.
- Inflation will be the main investor concern around the world.
- Understand the key trends impacting the wealth management industry in 2023 and how to respond.
- Discover the effect of the succession of negative events in 2022 on the industry and how they will shape 2023 strategies.
- Understand the best approach to client portfolio strategies amid current market conditions.
- Learn about possible use cases for artificial intelligence in wealth management.
- ESG
- Wealth managers remain committed to ESG even as banks and corporates focus on more pressing matters
- HNW demand for ESG now outstrips demand for philanthropy
- Private wealth managers are following the money
- Recessionary Conditions
- GDP growth will slow across most regions in 2023
- Wealth markets are struggling to shake off negative macroeconomic conditions
- GDP growth will be a challenge globally, but not in China and India
- HNW investors have moved away from risk assets to safeguard their fortunes
- The slide in profits will continue across the industry
- Cryptocurrencies
- The crypto crash was one of the top wealth management stories of 2022, and its recovery (or not) will shape 2023–24
- Financial services have become preoccupied with crypto since COVID-19
- Regulators will step in to reform crypto markets
- HNW crypto perceptions will change in 2023
- Russia/Ukraine Conflict
- Resolution of the Russia/Ukraine conflict appears unlikely in 2023
- Keeping up with evolving sanctions lists will remain a challenge for wealth managers
- Inflation
- Inflation will ease in 2023 but will remain elevated
- Key commodities are now lower than a year ago
- Inflation and market volatility are wealth managers’ key concerns
- Offshoring will increase in traditional safe havens such as the US and Europe
- Robo-Advice
- Robo-advisor usage has not taken off despite a pandemic boost
- Drivers of robo-advice uptake focus on cheap and easy, making it difficult to increase fees
- Profit will be down for the entire industry, but robo-advisors will be especially hurt
- Consolidation in the robo-advice space appears inevitable
- AI and Personalization
- Wealth managers are convinced AI can offer economical personalization
- ChatGPT will light a fire under the industry to invest in AI
- Key Take-Outs
- Appendix
- Methodology
- Secondary sources and further reading
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