Wealth management organisations in Asia are facing tremendous opportunities as the industry shifts from a product-oriented to advice-centric business model, says SEI, a global provider of outsourced asset management, investment processing and investment operations solutions. The need for wealth management organisations to re-evaluate the way they allocate resources and source their value chain is key to the evolution of business models, according to an SEI presentation at the Fourth Annual Private Banking Asia 2008 Conference held recently in Singapore.
“As the Asian market continues to grow exponentially, wealth management providers face significant opportunities, as well as challenges, in their efforts to drive customer value,” says Bill Cassidy, managing director for SEI Investments (Asia) Ltd. “Today, organisations are focused not only on their strategic imperatives to grow revenue and reduce cost, but also on becoming more competitive. To capitalise on the market shift, business models need to transform from being product-oriented to advice-centric.”
Cassidy says the five key market dynamics that are shaping the industry’s future and are likely to drive the transformation of wealth management organisations include:
Changing client expectations for wealth management services Difficulty in creating competitive differentiation Growing need for compliance and enterprise risk management Capitalising on opportunities of technology deployment The need for evolving business models
To enable this transformation of business models, organisations will be forced to make strategic sourcing decisions across each component of their value chain. “While historically the value chain was sourced almost entirely in-house, we believe competing in the future will require opening up the value chain and partnering with outside experts,” Cassidy says. “Working with the right business services partner can help wealth management firms capture opportunities and meet the challenges presented by these market dynamics.”