Expert: Tony Hanlon, Director and Mehul Kotecha, Partner, Strategy & Transactions - Financial Services, EY Facilitator: Roopalee Dave, Partner - UK Wealth Management Lead, EY
Headline:
- M&A activity is being driven by the need for investment in digital transformation and debates on how fragmented vs consolidated the wealth management industry is compared to other financial services sectors.
Discussion:
The group discussed the balance between meeting regulatory requirements around Consumer Duty and pricing transparency while still maintaining profitability and commercial success.
Key themes included the importance of clearly articulating value propositions, considering unbundling services, improving client engagement and communication, leveraging technology for evidence trails, and debates around fixed fee versus percentage of assets models.
There was emphasis on needing to demonstrate and evidence justification for charges, but also that the FCA is not expecting uniform pricing and profit is acceptable if there is a suitable explanation
Key takeaways:
- Review your value proposition and how it is communicated to different client segments
- Assess your pricing structure - are there opportunities to provide more transparency or alignment with services?
- Consider if any of your practices would be difficult to justify under the regulators’ Consumer Duty principles
- Evaluate your client engagement and communication channels - how could you enhance these?
- Discuss as a leadership team your perspective on industry fragmentation and whether your strategy should involve consolidation
