Have the sleeping Giants woken to disrupt Wealth Management?
We are seeing recent news articles highlighting that banks are poised to make a return into wealth management territory after having backed out as a result of the Retail Distribution Review (RDR).
Banks are switching their emphasis from investments and high-street operations to wealth management. Some of the factors driving the decision are: the impact of start-up digital disruptor banks (who doesn’t want banking made easy?) and the bottom-line effects of historically low interest rates; a growing number of big banks are looking at a new opportunity……..wealth management.
What are the advantages of banks moving to Wealth Management?
• Managing wealth avoids risk and uncertainties of the current corporate and investment banking model
• It provides more predictable earnings more reason for customers to stay (retaining their business).
• Attractive recurring revenue streams
• They have the power and capital to buy up small to medium wealth management firms
2022 could see multiple M&As of small and medium wealth managers into the banks or even big tech companies, but are measures required from the regulator to ensure healthy competition.
Imagine if Google or Amazon set up a Wealth Manager (I’m sure it would attract the younger generation to invest and take notice now rather than later in life).
So, the big question is who is going to follow the likes of UBS, Deutsche and others in this space…..