Winning in a new era: a call for innovation in wealth and asset management

The wealth and asset management industry stands at a pivotal moment, where the convergence of traditional and alternative business models is reshaping the competitive landscape. This is not just a passing trend; it is a fundamental shift that requires immediate and decisive action from industry leaders. The question is no longer whether to adapt, but how quickly and effectively we can embrace transformation.

In this new era, the winners will be those who dare to innovate and prioritize client-centric strategies. Firms that cling to outdated models risk obsolescence, while those that proactively seek to redefine their value propositions will emerge as leaders.

The urgency of strategic transformation

The pressures facing wealth and asset management firms are mounting. Margin compression is a persistent concern, even as assets under management have shown growth. Geopolitical tensions and economic fluctuations are influencing client behaviour, making it imperative for firms to reassess their strategies.

While wealth and asset management CEOs seem optimistic about their ability to seize market opportunities, it is clear that the current geopolitical and trade environment is giving them pause. According to the EY-Parthenon CEO Outlook Survey, 81% of CEOs in our industry anticipate that increasing margin pressures will necessitate their firms to streamline business units and/or their geographic footprint this year. The time for complacency has passed; the urgency for strategic transformation has never been clearer. The research also shows that achieving cost efficiencies, top-line growth and retention of key talent remain key priorities for wealth and asset management CEOs in 2025, and the majority are actively looking to pursue M&A, joint ventures and strategic alliances this year.

Identifying new growth opportunities

The democratization of alternative investments is becoming an accelerating trend, fuelled by growing demand from high net worth (HNW) and ultra high net worth (UHNW) investors for the returns and diversification that alternatives promise to deliver. Innovations such as semi-liquid structures, interval funds and new fund structures in Europe are making alternative investments more accessible to individual investors. The 2024 EY Global Alternative Fund Survey indicates that 37% of firms plan to target individual investors with private equity, highlighting the urgency for firms to enhance their capabilities in this area.

Our research also reveals a striking disconnect between client expectations and advisor engagement. According to our recently released 2025 EY Global Wealth Research Report, 61% of clients view alternative investing as a critical topic for discussion but many advisors are failing to initiate these conversations. This gap represents a significant opportunity for firms willing to invest in training and technology that facilitate deeper client engagement.

Moreover, the integration of artificial intelligence (AI) is not just a trend; it is becoming a necessity. Firms that harness AI to enhance client experiences and streamline operations will have a competitive edge. Yet, a staggering 64% of alternative fund managers report struggling with infrastructure gaps that hinder their ability to leverage AI effectively. Addressing these challenges head-on is essential for future success.

A call to action for bold leadership

As we navigate this new landscape, wealth and asset managers must adopt a mindset of agility and innovation. The question we must ask ourselves is: Are we prepared to lead this transformation? Embracing change requires not only a willingness to adapt but also a commitment to fostering a culture of continuous improvement within our organizations.

Investment in talent is equally crucial. The rising value of skilled professionals necessitates new hiring strategies and upskilling initiatives. Empowering our teams with the tools and knowledge they need to thrive will be vital in delivering exceptional value to our clients. Firms must align their strategies around the four essential pillars for growth: trust, transparency, technology and talent. Building trust through clear communication and suitable products is vital for attracting and retaining individual investors.

Shaping the future together

The wealth and asset management industry is at a crossroads, and the path we choose will define our future. The winners in this new era will be those who embrace transformation, innovate boldly and prioritize the needs of their clients. Let us seize this moment to redefine our industry, create lasting value and shape the future of wealth and asset management together. The time for action is now.

Join Hermin Hologan and the EY team at IMpower FundForum this June!

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.