Consolidation to Continue for at Least Another 10 Years
Private Capital Continues to Enable Significant Value Creation
London (3 May 2022) — L.E.K. Consulting, the global strategy consultancy, releases key findings from its UK Wealth Management Study looking at how the c. £2 trillion industry with c. 28,000 advisors has transformed business models over the past decade — driven by regulation, private capital and technology.
Notable findings of the L.E.K. study revealed:
Continued market growth — Despite Covid-19, the market has continued to grow due to favourable asset growth trends, momentum in new wealth creation and opportunities in yield management since 2017.
Growing industry profit pools — In the past decade, wealth management has been subject to significant change with regulation, private capital and technology shaping new business models, and continuing to enable superior client propositions, industry consolidation and larger profit pools.
Bronswe Cheung, Principal at L.E.K. Consulting in London said,
“Value-creation opportunities remain significant for both current and new participants in the UK wealth management industry. The industry remains in a state of flux and business models continue to evolve, but many businesses still lack agility and sophistication. Customers are often exposed to a ‘one size fits all’ approach that is neither desired by the client nor optimal for the provider. The full power of technology to harmonise business processes is also still to be realised. Vertical integration potential is not fully harnessed either. These areas represent as much an opportunity as a threat to current market participants.”
Eilert Hinrichs, Partner at L.E.K. Consulting added,
“In addition to vertical integration and consolidation, the need for organic growth will only be amplified in the coming years as private capital seeks exits. L.E.K. sees the role of technology-enabled business models and customer management sophistication growing as a result, enabling significant further value creation in the industry.”
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We’re L.E.K. Consulting, a global strategy consultancy working with business leaders to seize competitive advantage and amplify growth. Our insights are catalysts that reshape the trajectory of our clients’ businesses, uncovering opportunities and empowering them to master their moments of truth. Since 1983, our worldwide practice — spanning the Americas, Asia-Pacific and Europe — has guided leaders across all industries, from global corporations to emerging entrepreneurial businesses and private equity investors. Looking for more? Visit www.lek.com.