PwC: Asset and wealth managers must be 'fit for growth' as heyday of 30%+ profit margins not sustainable

Burgeoning wealth of HNWs

Global asset management AUM will almost double to $145.4trn by 2025, with passive funds expected to rapidly boost their market share to around 25%, but firms must become business revolutionaries if they are to prosper, according to a new report from PwC.

Entitled Asset & Wealth Management Revolution: Embracing Exponential Change, the report predicts total AUM will grow by over 6.2% a year, from $84.9trn as of 2016, to $111.2trn by 2020 and then again to $145.4trn by 2025. According to the report, active management will continue to grow, reaching $87.6trn by 2025. This will be around 60% of global AUM, down from 71% in 2016. However, passive strategies are expected to hit 25% of global AUM over the same period, compared to a current market share of 17%. The report said another key beneficiary of the changing environment will be alte...