Referring to a new report by his firm, the global head of investment management at KPMG International, said: “We are on the verge of the biggest shake-up the industry has experienced, and the message to asset managers is clear: adapt to change or your business will not survive.”
He said the two biggest issues that had to be addressed were the changing client base and technology. Asset managers needed “to get to work on these areas now,” he said.
The 78-page report, Investing in the Future, predicted that by 2030 the client base of a typical asset manager would be completely different to today’s, as Generation X approached retirement, Generation Y matured and the middle classes grew in emerging countries.
KPMG warned that current business models would not be fit for purpose.
Mr Brown added: “It is no longer just about attracting the clients who are armed with cash and ready to invest. The successful asset managers of tomorrow must focus on building cradle-to-grave relationships with a dramatically different and more diverse client base from today, which includes much younger investors. They must also be mindful that women are increasingly controlling a bigger share of family wealth.”
The report showed that demographics were changing and people were living longer and taking greater responsibility for their retirement planning.
According to the study, the pensions industry should expect to see a significant boost of new money from the growing middle classes in China, Mexico, India, Nigeria and other developing economies over the next 15 years.
The report also stated that most people will buy investment products online rather than through an adviser. Customers will also buy based on their own research supported by crowdsourced ideas on TripAdvisor-type websites.
Ian Smith, partner of KPMG’s strategy group, said: “The growing relevance of online communities and social networks is changing attitudes and behaviours. Consumers are increasingly looking to ‘people like me’, rather than professionals for advice, guidance and direction.”
Adviser view
Chris Williams, chief executive of Bristol-based Wealth Horizon, said advice models were too focused on the needs of the adviser and needed to adapt to technology challenges to better serve customers’ needs. He said: “While the majority of customers are happy looking for advice online, that is not to say they no longer crave human interaction. There is a need for a model that meets the needs of clients digitally, or simple needs, but offers additional augmented advice delivered as and when required.”
