For the best part of a decade, the UK wealth management industry has remained a growing and profitable market, offering high levels of recurring revenue. However, with large-scale macroeconomic disruption expected in the wake of the COVID-19 pandemic, investors and management teams must ensure that these businesses are positioned to remain competitive and valuable.
Recent research conducted by CIL modelled ‘baseline’ growth for the wealth management industry, showing that overall organic growth has been 7-8% CAGR, 2016-19. This reflects mainly passive, market-wide growth elements. We conclude that growth through new client acquisition is in fact a rarity. It is therefore a powerful form of differentiation that should be pursued in order to protect and enhance both future profits and valuations.
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