'Exponential change’ to drive assets to $145trn by 2025

By Daniel Lanyon on 30th October 2017

Robo-Advice

PwC's latest report is bullish on the growth of asset and wealth management.

'Exponential change’ to drive assets to $145trn by 2025

PwC's latest report is bullish on the growth of asset and wealth management. 

Global assets under management (AUM) are set to double in size, reaching $145.4trn by 2025, according to a new report from PwC.

Data from Willis Towers Watson from 2016 show that it was a record year for global assets with more than $80bn under management. This is set to grow rapidly, however, in the next eight years or so, owing to the “burgeoning wealth of the mass affluent” and high-net worth individuals, as well as a pronounced shift to defined contribution retirement saving. The asset and wealth management industry is set to manage a greater share of global retirement and pension funds, PwC says.

Its new report ‘Asset & Wealth Management Revolution: Embracing Exponential Change’, predicts rapid growth for the asset & wealth management industry but it also warns that firms need to take action now, if they’re to” survive an exponential level” of change.

PwC forecasts global AuM will grow by over 6.2 per cent a year, from US$84trn in 2016 to US$111.2trn by 2020, and then again to $145.4trn by 2025.

Europe’s share of global assets, it says, will grow at 8.4 per cent per year from 2016 to 2020, slowing to 3.4 per cent between 2020 and 2025, lifting assets from $21.9trn to $35.7trn over the nine years.

PwC predicts growth in passive management to reach $36.6trn by 2025, or about 25 per cent of global AuM), double the rate today.

Olwyn Alexander, PwC’s global asset & wealth management leader, says asset managers can take advantage of this massive global growth opportunity if they’re innovative.

“But it’s do or die, and there will be a ‘great divide’ between few have’s and many have not’s. As a result, things will look very different in five to ten years’ time and we expect to see fewer firms managing far more assets significantly more cheaply,” Alexander said.

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