Q&A with: Oliver Wyman
Anika Sidhika: What were the defining themes in private banking over the past year?
João Miguel Rodrigues: “Wealth management firms have generated lower revenue margins. Throughout 2024 and into the first half of 2025, this trend, driven by cash sorting and rising deposit betas, has reversed the rate tailwind, with revenue margins falling by around six basis points in 2024 and a further three basis points in the first half of 2025. Three-quarters of leading wealth managers saw this margin compression, with only half managing to offset this through cost-saving measures.
“Consolidation has moved from a theory to a reality, with deal activity holding strong at approximately 210 transactions per year since 2022. This trend is actively setting the competitive agenda and puts the industry on a path to having up to 20% fewer asset and wealth managers by 2029.
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“At the same time, alternative and semi-liquid investments have entered the mainstream. Fuelled by the growth of interval funds, non traded vehicles and evergreens, these semi-liquid formats have grown the market by 41% year-over-year in 2024. As such, it has made the private market more accessible as a core differentiator in retail and high-net-worth channels.
“Finally, clients with a network of $1-10 million have become a key group. This core high-net-worth group holds approximately $38 trillion in investable wealth, with roughly 6% of per annum growth. They also generate more stable revenue yield, accounting for 90 to 100 basis points, than the ultra-wealthy segment, provided that delivery is tiered and digitally scaled.”
AS: What key lessons from this year will be most important for the industry going forward?
JR: “To drive cost improvements, businesses should simplify and reduce complexity within their footprints, product and market offerings. They should also look to re-architect core platforms before modernising and automating tasks by shifting work from people to platforms. Doing this can help leaders unlock gross savings of up to 10 to 25%.
“Additionally, firms should look to build an ecosystem that supports private markets investments. These include educating advisors and clients, curating product shelfs as well as introducing engineering liquidity tools, such as gates, secondaries and prudent NAV lines, which are compatible with client portals and standardising their suitability to make allocation durable.
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By GlobalData“To support organic growth, the sector should industrialise this strategy. Historically, only about one-third of assets under management growth came from net new money. Firms who embed next best action analytics, straight-through-onboarding, pricing guardrails and incentives for sticky inflows have tended to outperform.”
Trends and Industry Dynamics
AS: How are client demands evolving, particularly around sustainability, alternatives, and digital solutions?
JR: “Alternatives are increasingly emerging a core investment approach. Affluent and high-net-worth individuals are closing the gap to institutional clients. Vehicles including evergreen and interval structures are being preferred by these investors, while private equity and private credit are seen as the entry point.
“Elsewhere, we are seeing the growth of digital first solutions. Clients expect to have self-serve portals, onboarding within 24 hours, proactive nudges, industrialized reviews as well as a senior adviser who can help guide clients with high-stake choices.”
AS: What emerging trends are likely to impact the financial services industry?
JR: “We expect to see approximately 1,500 transactions by 2029 across asset management and wealth management. This trend will be driven by banks reprioritising their onshore footprints and by independent firms consolidating, often backed by private equity. The rise of tokenisation, such as stablecoins and deposit tokens, will also reshape deposit economies by pulling client cash funds off bank balance sheets. As a result, net interest income is becoming more cyclical and cash management is migrating towards a fee and custody economics-based model.
“Beyond this, AI will continue to operate as both a spine and talent disruptor. Firms are integrating AI to help drive personal productivity to enterprise efficiency and redesigning apprenticeship models and supervision to reflect AI-augmented research and advice. Synthetic fraud is becoming more sophisticated, with deepfakes and AI-enabled scam, driving the need for multichannel verification mandates and client education initiatives.”
AS: What macroeconomic or market scenarios are top-of-mind for 2026?
JR: “Wealth growth but tighter economic conditions will define 2026. Global household financial wealth is projected to grow around 5.5% per year to 2029; yet revenue margins gained by firms continue to shrink. For instance, the reversal in Net Interest Income between 2024 and 2025 highlight a greater reliance on fees and the lending mix. Across regions, absolute wealth growth will be concentrated in North America and the APAC region. For cross-border wealth, Switzerland, Hong Kong, and Singapore remain the favoured locations, while the US and the UAE will gain a larger share.”
AS: Which investment themes, sectors, or strategies do you expect to gain traction next year?
JR: “Through investments including evergreen and interval vehicles that are tailored to HNW clients, the private credit, real asset and secondaries market will continue to perform well and there will be continued demand for yield-plus with controlled access points in 2026. Beyond this, portfolios will increasingly use tokenised cash for yield retention and for spend, collateral mobility and automated cash sweeps.”
AS: How do you see private banking evolving over the next 3/5 years to meet changing client expectations and industry dynamics?
JR: “The industry will move from providing bespoke, manually created financial advice to an industrialised model. In this new model, a central, automated “advice engine” acts as the brain of the business, with the system automating more than 90% of processing. The involvement of human advisors is now rationed, reserved only for complex situations such as market volatility or significant client life events.
“Additionally, firms will develop specialised propositions, designed specifically for high-net-worth individuals with a network of up to $1-10 million in assets with explicit service entitlements, transparent pricing bundles, and a hybrid team model that can safely double advisor capacity. These propositions will offer different service levels based on the client’s wealth; for example, clients in the $1–3 million tier receive model-led automated advice. Alternatively, those in the $3–10 million tier will receive deeper financial planning.
“Banks will provide greater access to private markets in the form of platform capabilities. Banks will institutionalise curation, suitability, pacing and plumbing through private markets portals and deliverables. An organic growth machine will also be introduced to support the day-to-day operations. The system will adopt next best action analytics, disciplined pricing, and incentives to bring in high-quality net new money on a weekly operational basis.
“Lastly, security and identity verification “table stakes” should be introduced as a standard requirement for clients. Features including dual channel verification, liveness checks and provenance signals should be embedded into client communications. Regular staff and client training will also become a standard part of business-as-usual operations.”
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