More than 200 organisations in more than 50 countries took part in the PwC 2013 Global Private Banking and Wealth Management Survey, which found that, among those surveyed, Switzerland continues to be regarded as the top international financial centre, but they expect it to be superseded by Singapore in as little as two years’ time.
Currently Singapore’s financial services industry looks after an estimated $2trn in assets.
As the global marketplace moves towards greater transparency, the survey’s respondents predicted that Switzerland will also face greater competition from London, while Shanghai and Dubai were also mooted as fast-growth centres, closely followed by Brazil, Miami and Mexico City.
According to PwC, the future will be about "developing defined areas of expertise [in order] to differentiate, as transparency is increased and regulatory standards create more of a level playing field".
The report warns that, given these changes, many of the survey’s respondents aren’t fully addressing their client’s needs – especially in Europe and North American markets.
"As health care provisioning and life expectancy projections increase, there needs to be greater focus on wealth de-cumulation to fund extending periods of lifestyle adjustment and retirement," the report states.
It is also important for wealth managers to distinguish between the needs of the aging baby boomer population in the developed markets and younger, more entrepreneurial-related wealth needs in emerging markets, it points out.
Addressing the needs of younger clients and managing intergenerational wealth is also seen as being key in retaining family office clients, with "a decision by the next generation" cited as the third most important reason that clients leave to go elsewhere.
Elsewhere, the survey finds that regulatory pressures are driving cultural change in the private banking industry, and that trust still needs to be restored if it is to prosper sustainable.
Of the private banking participants it surveyed, most see the future as being less about providing products and services and more about delivering solutions and advice. "The industry value chain is evolving with greater specialisation and focus on the key determinants of success."
This sees new competitors competing alongside old, the report states.
Respondents to the survey were categorised as 50% offshore and 50% onshore. The so-called "onshore" clients state that their focus is now geared towards core affluent and HNW customers, while the "offshore" wealth managers say they are concentrating on UHNW and family offices.
New wealth accounts for half of all respondent’ clients – which they expect will rise to 60% of their assets under management in two years’ time, PwC says.
To read and download a copy of the 64-page PwC report, click here.
