A net 15% of industry respondents across the world expect profitability to decline in wealth management compared to last year, with the Middle East and Africa having the gloomiest outlook.
According to GlobalData’s latest industry poll of wealth management professionals, there is little to cheer about in any region of the world, with those seeing a decline in profits relative to 2022 outstripping those seeing growth by considerable margins. Wealth managers in the Middle East and Africa are on track for the greatest declines, with 57% seeing a decline relative to 2022, though it must be noted that 2022 was relatively good for those catering to the oil exporters of the Gulf.
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The industry focus on growth in Asia-Pacific looks set to continue, with respondents in the region being the most optimistic regarding profits, though it must be noted the region still posted a net negative even without including mainland Chinese wealth managers. Given all the negative economic news from China, it is not likely that these respondents would improve the outlook for the region.
Given the negative outlook, we can expect another contraction in industry profits in 2023 rather than the bounce back that many had hoped for. However, given the relatively buoyant H1 results, the dip looks set to be widespread but shallow.
Profitability of wealth management industry in 2023 compared to 2022
Andrew Haslip is Head of Content for Wealth Management and Asia Pacific, GlobalData
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