Coronavirus (COVID-19) - Wealth Management sector impact - 04 August 2021

Globaldata's report on the impact of COVID-19 on the Wealth Management sector, includes detailed coverage of the wealth management sector analysis, COVID-19 impact, and sector insights among others.

COVID-19 has now spread to over 198 countries with a total of more than 194 million confirmed cases and over 4 million deaths. The number of confirmed cases is the US is over 34 million, with cases again rising after a sustained period of decline. As in many other countries, most new cases are of the Delta variant, with hospitalizations also on the rise (97% of those admitted are unvaccinated). Total COVID-19 vaccine doses administered have now surpassed the total number of confirmed cases, with a total of over 2.9 billion single vaccine doses administered. China leads in the total number of vaccinations, while Canada leads amongst top economies in the percentage of population that has received at least one dose of the vaccine.

A concrete summary of the impact of COVID-19:

• Hiring prospects appear to have been gradually improving since April 2021

• Nearly 45% of employees report an increase in productivity during WFH

• Most offices will return to at least 50% capacity in the next six months

• 3 in 10 employees prefer to visit their office daily after the pandemic

• Technology will continue to change the way we work over the next three years

• Artificial intelligence is driving change in working practices

• Most respondents continue to work from home full-time

Sector insight:

Wealth managers are adapting to remote working while managing clients at a key moment of truth: portfolio losses. Millennials are experiencing their first severe market downturn. Baby boomers will appreciate help on how to manage their investments online and assurance that digital channels are effective. Merger and acquisition activity has slowed due to the crisis but has not derailed the giant E-Trade-Morgan Stanley or TD-Ameritrade-Charles Schwab deals and smaller robo advisers are increasingly being targeted for acquisition

Major international brands benefited from a flight to quality following market disruption, increasing their share of net new money. Sub-scale brands are likely to rationalize footprint, consolidation of smaller players will increase as scale becomes more important in all areas of the market regardless of geography or focus (UHNW, Swiss Private, etc)

New investors have turned to robo-advisers in greater numbers in the crisis. The US robo-advice industry is estimated to be $1tn at the end 2020, a marked increase in investor market share. The higher AUM gives major players within it the scale to be profitable and compete with even the largest traditional wealth managers, small scale robo-advisers are being acquired. Managing and retaining new investors will be a major challenge, as highlighted by Robinhood's IPO

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