GlobalData Plc

Developed markets still a catch for wealth managers

According to GlobalData’s Opportunity Index, wealth management markets in mature economies across Asia Pacific and North America still represent lucrative opportunities.

GlobalData’s Opportunity Index identifies the business opportunity for competitors wishing to enter the market or expand their offerings. Emerging Malaysia tops the ranking, but developed Canada and Singapore immediately follow. On the other end, mature European countries place themselves at the bottom of the ranking, due to slow forecast asset growth and the already mature stage of wealth management services.

Canada’s high score is driven by the opportunity in offering inheritance planning services. The market is now confronted with an aging population. Our data shows that 36.4% of Canadian millionaires are over the age of 60, but this is a trend observed across the entire population. Yet provision of inheritance planning advice is still low in the country, and companies that are able to fill the gap will be successful.

On the other side of the globe, Singapore places itself among the top three, with impact investments being the product for which a gap between demand and supply is the largest. In fact, impact investments have seen a rise in demand in recent years around the world. Moreover, according to GlobalData’s Wealth Markets Analytics, Singapore ranks seventh in terms of savings per capita. It is not surprising that wealthy individuals residing in Singapore feel compelled to address inequalities in neighboring developing countries.

Both in Canada and Singapore, however, competitors face tough competition. According to the Index, the advice gap in these markets is low as opposed to emerging ones. A large share of wealth is already placed with professionals, and any new entrants will have to invest a lot of effort in convincing investors to move their assets. This is common in mature markets, which tend to be saturated by the presence of established incumbents and fintech disruptors. It is in developing economies such as the UAE where most wealth is still unmanaged, leaving greater opportunity for advisors to increase AUM.

All in all, despite mature markets retaining their attractiveness when compared to emerging ones, wealth managers need to be aware of the strong competitive threats. In order to gain new market share, advisors will have to take some risk and enter niche segments of the market, as well as adapt their strategies to the specific needs of the populations they are targeting.

By Silvana Amparbeng, Wealth Management Analyst

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