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Inside magazine issue 12 | Part 03 - From a corporate perspective<br />
Profit in the wealth management<br />
industry remains under pressure<br />
Client wealth levels suffered significant<br />
decreases following the recession in<br />
2007-2008 that led to significant declines<br />
in wealth managers’ Assets under<br />
Management (AuM) and profitability.<br />
However, despite notable recovery in AuM<br />
since then, wealth managers are struggling<br />
to recapture the high profit margins<br />
they experienced in the past. Indeed,<br />
as il<strong>lu</strong>strated in Figure 1, pre-tax profit<br />
margins remained between 17bps and<br />
19bps while AuM grew by approximately<br />
70 percent between 2008 and 2015.<br />
Figure 1: AuM and pre-tax margin evo<strong>lu</strong>tion<br />
100<br />
81 84 84<br />
17<br />
78 77<br />
75<br />
77<br />
14 17<br />
82<br />
19<br />
18 18<br />
18 19<br />
67 67 65<br />
61 59 57 58<br />
100 115 124 131 142 157 169 169<br />
AuM (indexed at 2008)<br />
Cost margin (in bps)<br />
Revenue margin (in bps)<br />
Pre-tax profit margin (in bps)<br />
85
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