The report, based on a survey of 220 wealth-industry professionals, including investment teams, portfolio managers and financial advisers, reveals that 60 per cent expect their HNW clients will require some degree of personalization – either now or in the near future. Wealth management is evidently at an inflection point as it adapts to the evolving needs and preferences of individual investors.

In the past, personalisation in wealth management was a primarily niche offering, typically reserved for a select group of high-net-worth (HNW) clients. However, MSCI’s research suggests the democratisation of wealth management has transformed personalisation from a luxury to an industry standard, with technological advancements cutting costs and driving efficiency and scalability to provide bespoke portfolios to a much broader client base than ever before:

73 per cent of respondents named personal preferences – such as supporting the transition to net-zero or better corporate governance – as the prime reason wealth clients are seeking more personalized solutions.

58 per cent of respondents believe it is easier to build a new custom model than modify an existing one.

“The demand for personalised portfolios is growing across all client segments, from high-net-worth individuals to emerging affluent investors,” says Alex Kokolis, Global Head of Wealth at MSCI. “A broader set of clients now expect personalization in all aspects of their lives, including financial services, driven by trends in other industries. They want portfolios tailored to their unique goals, values, and preferences.”

As personal preferences gain importance in the composition of wealth portfolios, advisers’ clients are likely to seek assurance that their portfolios are aligned with their values – requiring wealth managers to go beyond the investment information traditionally reported to clients and finding ways to provide greater transparency into what the client’s capital is funding in both public and private markets:

Across all regions, wealth managers anticipate making larger allocations (82 per cent on average) to private assets over the next three years.

However, as interest grows in private markets, advisers (21 per cent) and portfolio managers (40 per cent) view their current solutions for this asset class as insufficient – compared to 59 per cent of investment teams.

Roughly half of all respondents (45 per cent) reported a limited understanding of private assets as the biggest barrier to making higher allocations.

Other notable barriers were the illiquid nature of investments (52 per cent) and the lack of transparency into the asset class (46 per cent) – with fears notably higher among financial advisers (73 per cent and 59 per cent respectively) as they seek to meet client demand for greater assurance and visibility. 

“In private assets, wealth management firms may be able to differentiate themselves through their education and learning offerings just as much as their investment offerings – both for advisers and end-clients,” Joseph Wickremasinghe, an executive director at MSCI Research, says. “Beyond that, tools or frameworks to standardise or streamline the due diligence process for private asset investments, or perhaps access to a slate of pre-vetted investment opportunities, may be another solution that end-clients find appealing. Being able to choose specific private investments from a selected range that have been deemed appropriate for the size of their allocation, their broad liquidity needs and investment preferences could increase their level of comfort with this asset class.”

Technology is at the heart of enabling transparency and personalization – but MSCI’s survey results suggests respondents feel many of their current solutions need to be upgraded to allow them to satisfactorily deliver on HNW clients’ expectations.

When asked to rank the areas in which their current technology solutions fall short, advisers conducting manual monitoring of client portfolios came in top at 45 per cent, followed by 42 per cent reporting a lack of dynamic insights on taxes, risk and other elements that impact decision making.

Wealth managers are also eager for a platform that can provide a single interface to manage all assets within all portfolios (39 per cent) and, of equal interest, is to design an appealing client portal (39 per cent).

“The demand for investment transparency has evolved significantly beyond simple monthly position reports, as today’s wealth clients seek deeper understanding of their investments’ alignment with personal values and financial goals,” Dhruv Sharma, an executive director at MSCI Research, says. “Digital platforms can help wealth managers meet this need by aggregating and presenting complex data in meaningful ways – from traditional exposure analysis across geographic and thematic dimensions to detailed insights into private asset classes, such as private credit and private equity. Wealth solutions providers add value by simplifying complex information without sacrificing depth, helping advisers address critical client concerns while providing clear visibility into portfolio exposures.”

The report also finds that global AUM held by AWM organisations around the world is projected by PwC to hit USD171 trillion by 2028, with tokenised products to surge at a CAGR of 50 per cent.

Albertha Charles, Global Asset & Wealth Management Leader, PwC UK, says: “Disruptive technologies such as AI are transforming the asset and wealth management industry and fuelling revenue growth, productivity and efficiency. Market players are subsequently looking to strategic consolidation and partnerships to build tech-driven ecosystems, break down silos in data management, and transform their service offerings ahead of a great wealth transfer that will see mass affluents and younger audiences play a greater role in shaping service demands. To emerge as leaders in this new digital-first market, AWM organisations must invest in their technological transformation while also ensuring they are re-skilling and upskilling their workforces with the necessary digital capabilities to remain competitive and innovative.”

Disruptive technologies will fuel AWM revenue growth

AWM organisations broadly see disruptive technologies such as AI as transformational, with more than three-fifths viewing it as the most transformative technology over the next two to three years. 80 per cent say such technologies will fuel revenue growth, with 84 per cent noting it will improve operational efficiency and 72 per cent noting it will improve employee productivity. The provision of tech-as-a-service by AMW organisations could deliver a 12 per cent boost to revenues by 2028, according to PwC analysis.

While such technologies represent an opportunity to turbo-charge operations and access new markets, more than three-fifths (68 per cent) say that they allocate less than one-sixth of their capital to innovative and potentially transformative technologies, with more than half (59 per cent) of institutional investors noting such technologies could reduce their reliance on asset managers. This comes as only 20 per cent of AWM organisations are currently using disruptive tech to enhance personalised investment advisory.

Global AUM to hit US$171 trillion by 2028, with alternatives leading the way

Under baseline projections, PwC research estimates global assets under management (AUM) held by asset and wealth managers (AWMs) is expected to hit USD171 trillion by 2028, reflecting a 5.9 per cent CAGR, and up from 5 per cent last year. Alternatives are projected to grow much faster – at a CAGR of 6.7 per cent, to reach USD27.6 trillion by 2028.

As AWM organisations look to new growth opportunities, tokenisation stands out, with tokenised products expected by PwC to increase from USD40 billion to over USD317 billion in 2028, representing a 50 per cent CAGR. Tokenisation, or fractional ownership, could expand market offerings by democratising finance and lowering premiums, with tokenisation planned to be offered notably by asset managers in private equity (53 per cent), equity (46 per cent), and hedge funds (44 per cent).

While alternatives represent a significant growth opportunity, less than one-fifth (18 per cent) currently offer emerging asset classes such as digital assets as part of their offering – even as eight in 10 that do offer such assets report a rise in inflows.

AWM looks to consolidation and tech ecosystems as talent remains top priority

Against this backdrop, 30 per cent of asset managers say they are currently facing a lack of relevant skills and talent, while 73 per cent of AWM organisations who are exploring M&A see access to skilled expertise as the number one driver for deal-making over the next two to three years.

As AWM organisations contend with digital disruption and expanding their talent and product pools, more than four-fifths (81 per cent) are contemplating strategic partnerships, consolidations, or mergers and acquisitions to build an extended tech ecosystem to drive growth.

Albertha Charles, Global Asset & Wealth Management Leader, PwC UK, concludes:

“The report highlights an urgent need for AWM organisations to rethink investment strategies. Long-term viability depends on a radical, fundamental and continuous reinvention of how organisations create and deliver value. Strategic partnerships and consolidation will play a vital role in building tech ecosystems that will facilitate a greater transfer of ideas and expertise. Smaller players will be able to bring their systems up to speed quickly and cost-effectively, while allowing larger players to access talent and insight pivotal to growth, particularly as new and emerging technologies such as AI transform the investment management landscape.”

Through the joint venture, AlTi and AllianzGI will launch a private markets investment programme for UHNW clients that will benefit from AllianzGI’s exceptional network and scale. By investing alongside Allianz, the program will provide unprecedented access to leading third-party managers with outstanding track records, significant scale benefits, low minimum ticket sizes, and expanded investment opportunities, including secondaries and co-investments.

The program will initially focus on the approximately USD1.5 trillion global private debt market, leveraging AllianzGI’s track record in private markets for over 25 years.

Michael Tiedemann, CEO of AlTi Tiedemann Global, says: “Our AlTi-Allianz Private Debt Program sets a new benchmark in the UHNW wealth management industry. We are delighted to offer our clients unique access to Allianz’s world-class network of third-party managers at attractive terms and with additional access to co-investments and secondaries. We believe the combined resources of our platforms will provide current and prospective clients with an offering that is unmatched in the alternatives investment space.”

Tobias Pross, CEO of Allianz Global Investors, says: “For ultra-high-net-worth individuals and select institutional investors, diversification beyond the public financial markets can help to preserve and grow capital. Private debt’s diversification benefits, coupled with its attractive risk-adjusted returns, make it a compelling component to investors’ portfolios. Through our strategic partnership, we are able to bring some of the best investment opportunities in private markets to the most discerning and dynamic owners of capital in the world. We believe this is only the beginning, as we seek to expand our joint offerings in private markets in the months and years to come.”

Nazim Cetin, CEO of Allianz X, says: “This partnership is a powerful demonstration of Allianz X’s prowess as a strategic investor and business builder – for its partner companies and the Allianz Group. The formation of our JV with AlTi just months after our initial investment is a first building block of what we can achieve together in the expanding wealth management sector. We’re poised to revolutionize access to the private markets, initially through private debt, and we are confident that investing alongside Allianz will unlock new opportunities for AlTi, Allianz, and the broader UHNW market segment.”