Global wealth made a remarkable comeback in 2009. For many wealth managers, however, the recovery did not translate into stronger performance. Participants in a benchmarking study experienced falling revenues, narrower revenue margins, and rising cost-to-income ratios, despite the growth in assets under management. The report describes how wealth managers can overcome these challenges by using operating levers such as pricing to boost revenue margins; communicating their strengths to retain or win back clients; and transforming their approach to managing risk.
The increasing interdependence between business and society presents an opportunity for companies to develop “social advantage” by aligning the business and social dimensions of their strategies to create more sustainable, valued, and expansive business models. Creating social advantage goes beyond financial metrics to renewing depletable resources and goodwill, meeting and capitalizing on consumers’ ecological needs, and developing new markets around alternative and renewable resources. This Perspective cites three examples of companies that have succeeded in building social advantage.
The recession offered a powerful reality test for megatrends. The ones that survived the downturn and even grew in spite of it are worth paying attention to. Of the 78 megatrends BCG has tracked since 2005, 80 percent continued to grow during the downturn and 23 trends actually strengthened in their influence on markets. These trends and trend clusters (groups of mutually reinforcing trends) will open up a new strategic landscape for companies that move quickly to leverage them.