Asset & Wealth Management
PwC Asset and Wealth Management - Focus on strategy, technology and people
PwC’s Asset and Wealth Management (AWM) practice is at the heart of the firm’s strategy. Additionally, our firm plays an important role in the PwC Global Network, with Steven Libby as the EMEA AWM Leader, and Rima Adas the EMEA FS Leader and member of the Global FS team. This allows us to showcase and exchange different lines of expertise within the network.
AWM continues to be a key revenue generator for PwC Luxembourg. Even with turnover slightly below the previous year (- 2.6% vs. FY 19), this falls in line with our expectations as clients shift their product launch focus to other asset classes, such as Alternatives. The AWM industry is an integral part of Luxembourg's financial landscape, making the country the hub for related players. With EUR 4,404bn of AuM in Luxembourg funds in September 2020 (source ALFI), Luxembourg is the 2nd largest investment fund centre in the world and the largest European investment fund centre.
In AWM and across our firm, we are thinking ahead. Is it impossible to imagine that one day, with people working from home, internal audit will need to pass by their house? Is getting back to normal actually desirable, or is the office concept from January 2020 just outdated, with or without COVID-19? No longer is fund management and administration the same environment with the same activities it was in the early 2000s. It is time to rethink the working environment in the AWM industry according to the technological and other developments within the changing landscape.
No more “business as usual”
The COVID-19 pandemic has brought the world into uncharted waters. While there are many challenges to be confronted, the bottom line is that the industry, its workforce and customers, the markets and economies will survive. In fact, the industry will learn from the experience and become stronger for it, even increasing its importance in the financial markets.
When challenges arose for clients, such as valuation issues, sidepockets, unclear tax filing deadlines, CSSF positions and reactions, BCP, and governance issues, we swiftly introduced our COVID-19 Business Briefing for Asset & Wealth Management, which was a virtual conference on a weekly and then biweekly/monthly basis, and we made our experience and knowledge available in the initial period when it was more critical on an almost 24/7 basis.
On top of that, we were able to quickly adapt to our clients' demands, namely to offer a solution to stay in contact with them and quickly provide answers to their questions. For this we have set up weekly calls - the AWM Weekly Briefing- every Thursday.
To assist our clients with their challenges, PwC maintains very close relationships with clients and the Financial Services industry. We host conversations with the local industry and share the highlights, as we did in this paper COVID-19 - A conversation with the Asset Service Provider Industry, where we addressed how the AWM industry will cope in this COVID-19 world. This ended up being a testament to the remarkable achievement of how Luxembourg Asset Service Providers (ASPs) adapted the entire ecosystem of the Luxembourg financial sector rapidly, and with minimal service disruption from an almost total office working environment to a home based one. More importantly, the report revealed key findings that will help to inform the strategy for CEOs and COOs and the sector as a whole.
Better service through technology
Globally, PwC is deep into its digital transformation journey and the focus is on client facing software, but we are also revamping our internal software landscape highly dedicated to the AWM industry.
Together with our network, we have been building a single, unified approach to gathering investment funds data. We then transform these data, augment and activate them with our automation suite, PwC Asset Management Digital Solutions. These interconnected apps deliver real-time insight and support our services in different areas such as Tax, Risk Management, Reporting and Audit of financial statements.
Combining business strategy, customer experience and technology, we also continue to develop our Track for Funds - PwC's digital solution for tax in the Asset and Wealth Management sector.
Providing market data and insights to our clients
In June, 2020 PwC Luxembourg published its 5th edition of our highly regarded Management Company Observatory Barometer (and poster), which offers an excellent grasp on the world of Management Companies. Also, in May 2020, our PwC Market Research Centre released the 20th edition of its annual Global Fund Distribution Poster.
Looking forward/2020 and beyond
The asset management sector faces - again - significant opportunities and challenges. Sustainability related funds are expected to show a massive growth. Luxembourg has shown it is resilience and flexibility in dealing with the COVID-19 crisis. On the other hand, even before the crisis, the sector was confronted with the need to re-engineer its value proposition. The rise of technology, margin pressure and changes in asset classes are only some of the challenges and they are now even more urgent. It will be crucial for Luxembourg to ensure a continued competitiveness and to demonstrate agility in dealing with regional and global developments - particularly as this was a key strength of the financial centre during the past decades. “Let'z” ensure it is also in the future!
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