The wealth management industry around the world is witnessing a multitude of changes due to weak economies in the developed world, strong growth in developing markets like China and India, an uncertain political future in Europe, increasing regulatory supervision, and new competition from rising FinTechs and their innovative services for High Net Worth Individuals (HNWIs). Our analysis in this paper revolves around the impact of the above mentioned dynamics on the industry players and how they are adapting through this phase of transformation.

1. Wealth Management
Trends for 2017

2. 2Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Wealth Management Trends 2017
Spate of regulations
is encumbering
wealth
management firms
with more
compliance related
activities
Increased Focus on
Fiduciary Duty and Client
Interest
Business-As-Usual Taking
Up a Significant Portion of
Investment Budget
Continued Focus on
Cybersecurity in Light of
Increasing Digitization
1
2
3
Wealth Transfer Remains A
Significant Growth
Opportunity
Shifting client
needs are
disrupting
established models
while also creating
new opportunities
Emerging Advisory Models
Evolving Fee Models
4
5
6
In response, wealth
mangers are seeking
enhanced digital
capabilities and
firms are focusing to
improve mid- and
back-office
productivity
Growing Demand for
Digital By Wealth
Managers
Surge in Robotic Process
Automation
7
8
Furthermore, firms
are also looking to
leverage emerging
technologies and
partnering with
FinTechs
Collaboration With
FinTechs
Increasing Application Of
Artificial Intelligence Based
Analytics
9
10

3. 3Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Fiduciary Duty Gaining Prominence due to
Regulatory Focus
US$17
bn
Yearly cost for American
clients because wealth
managers are
incentivized to push
higher margin products
DOL Fiduciary Rule to be
Effective from April 2017
Lower Costs for Clients
Stricter Regulatory
Environment
Transparency
Source: Capgemini Financial Services Analysis, 2016; “Obama Vetoes Resolution to Kill DOL Rule; New Lawsuit Filed”, Diana Briton, Wealth Management, June 9, 2016, accessed October 2016 at http://www.wealth
management.com/legal/obama-vetoes-resolution-kill-dol-rule-new-lawsuit-filed
BICE
Best Interest Contract
Exemption (BICE)
conditions will ensure
that advice is in clients
best interest

4. 4Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Business-as-Usual Taking Up a Significant
Share of Investment Allocation of Firms
15.3%
Investment budget
needed for business-
as-usual activites,
restricting new
proposition
development
Source: Capgemini Financial Services Analysis, 2016; WWR Executive Interviews, 2016
Increased compliance requirements make day-to-day activities a
burden
Wealth Managers want better digital access and collaboration with clients

5. 5Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Continued Focus on Cybersecurity in Light of
Increasing Digitization
Increased
Investments
More Openness = More Risk
Prime Targets
74%
Wealth managers had
been a target of a
cyberattack
Source: Capgemini Financial Services Analysis, 2016; “Is your wealth manager a target for a cyberattack?”, Deborah Nason, CNBC, February 3, 2016 accessed October 2016 at http://www.cnbc.com/2016/02/02/is-
your-wealth-manager-a-target-for-a-cyberattack.html

6. 6Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Emerging Advisor-Client Relationship Models
to Cater to Client Demand
Pure Automated
Advisory Model
Source: Capgemini Financial Services Analysis, 2016
Hybrid Advice Model
Holistic Goals-Based
Financial Planning and
Wealth Management
Model

7. 7Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Evolution of New Fee Models
Only 23.6% of
HNWIs want AuM
based fee, but
30.1% use it
currently.
Performance
based Fee
Structures
Changing
Customer
Demand
New Value
Propositions
Source: Capgemini Financial Services Analysis, 2016; Capgemini Wealth Manager Survey, 2016

8. 8Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Intergenerational Wealth Transfer Remains a
Significant Growth Opportunity
$36
tn
Wealth is expected
to be transferred
to heirs from 2007
to 2061
Need for succession and
inheritance tax planning
Source: Capgemini Financial Services Analysis, 2016; ‘New Report Predicts U.S. Wealth Transfer of $59 Trillion, With $6.3 Trillion in Charitable Bequests, from 2007-2061’, Boston College Center on Wealth and
Philanthropy, May 28, 2014
Great opportunity for wealth
managers
New demand of younger HNWIs

9. 9Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Growing Demand for Digital Tools by Wealth
Managers
80%
Wealth Managers
believe digital tools
have positive impact
on their overall ability
to cater to HNWIs
72.9%
HNWIs say digital
maturity is significant
in increase/decrease
decisions with asset
allocation
High Demand for digital capabilities by HNW clients
Wealth Managers want better digital access and collaboration with clients
Source: Capgemini Financial Services Analysis, 2016; Capgemini Wealth Manager Survey, 2016; Global HNWI Insights Survey 2016, Capgemini

10. 10Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Surge in Robotic Process Automation in Mid-
and Back-Office
Replace Routine, Repetitive, Rules-based Tasks
Improved Compliance
Source: Capgemini Financial Services Analysis, 2016
Enhanced Accuracy

11. 11Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Increasing Collaboration between Incumbents
and FinTechs
FinTech Innovation &
Development Capabilities
Synergy
will
Enhance
Client
Experience
Incumbent Distribution
and Brand Loyalty
Source: Capgemini Financial Services Analysis, 2016

12. 12Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
Increasing Application of Artificial Intelligence
Based Analytics Solutions
Cost Benefits
Productivity
Gains
More
Customization
Source: Capgemini Financial Services Analysis, 2016

13. 13Copyright © Capgemini 2016. All Rights Reserved
Presentation Title | Date | Financial Services
About Capgemini
With more than 180,000 people in over 40 countries, Capgemini
is one of the world's foremost providers of consulting, technology
and outsourcing services. The Group reported 2015 global
revenues of EUR 11.9 billion. Together with its clients, Capgemini
creates and delivers business, technology and digital solutions
that fit their needs, enabling them to achieve innovation and
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Business ExperienceTM, and draws on Rightshore®, its
worldwide delivery model.
Learn more about us at www.capgemini.com
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The information contained in this presentation is proprietary.
© 2016 Capgemini. All rights reserved.
www.capgemini.com