A CMO's perspective on the BWC Benchmarking 2025 Report

The State of UK Wealth Management 2025: What the Numbers Really Mean for Our Industry

This year, I read the report differently: not as an insightful report, but as a mirror. And I realised that the reflection was a little more uncomfortable than I had anticipated.

On the surface, the story looks straightforward. Records broken, assets growing, revenue at an all-time high. But beneath those headlines lies a more complicated picture. One defined by rising costs, shrinking profit pools and a client base that is more mobile, more demanding and less loyal by default than at any point in our industry's history.

As a CMO in wealth, I've learned to read between the lines of data like this. Because the numbers that matter most to me aren't always the ones that make the headlines. They're the ones that reveal where trust is being built and where it's quietly being lost.

And it’s that strapline ‘where trust is built and lost’ that will differentiate the firms that grow profitably and those who are left behind. It is not solely about managing money well. It’s about those who communicate their value clearly, earn client loyalty continuously and build brands strong enough to withstand the growing pressure from lower-cost, highly visible competitors.

That's the challenge I come to work for every day. And reports like this one remind me exactly why it matters.

First, the good news: wealth is a thriving industry

The fundamentals of our industry remain genuinely impressive. At the end of 2024, UK wealth management managed and administered over £1.5 trillion in private client assets: a new milestone, up 10.2% year on year.

Total industry revenue exceeded £10bn for the first time, driven by strong growth in investment management fees (up 8%) and a surge in commissions (up 14.9%) on the back of record trade volumes.

Discretionary assets (the core of most wealth management propositions) grew by over £70bn during the year. SIPP assets hit a new record of £199bn. And the industry added more than 1,000 employees, bringing total headcount to 44,662.

By almost any headline measure, this is a thriving industry.

But here's where it gets complicated

·       Costs rose by 6.6%, outpacing revenue growth and compressing margins across almost every firm type.

·       Average pre-tax profit margins fell from 24.5% to 23.2%.

·       And 41% of full-service wealth managers and investment managers are either loss-making or operating on margins below 10%.

The two biggest cost pressures are compliance and technology.

·       Compliance and professional fees jumped by over 30% year on year: an unavoidable consequence of the FCA's relentless regulatory pace.

·       Technology spend approached £1bn for the first time, up 24% in a single year and close to triple what it was a decade ago.

These are investments in the future, and the data is already showing a return.

The firms spending the most on technology per front office professional generate more than double the revenue of those spending the least. But the full dividend hasn't landed yet, and in the meantime, margins are taking the hit.

This is the central tension of 2024: an industry investing heavily in its future while feeling the pressure of that investment today.

The scalability question that nobody really wants to answer

That central tension, along with the data, made me think about the future of our industry and prompted the question: Is UK wealth management actually scalable?

On paper, the answer should be yes. Assets are growing, revenue is at record levels, and the long-term fundamentals are compelling. But scalability (defined by BWC as being profitable while simultaneously growing both revenue and margin) is vanishingly rare in this industry.

Investment managers were the only firm type to achieve it in 2024. And it was only the third time in the past decade they managed it.

Will prohibitive costs stall scaling?

·       Compliance costs have increased by over 30%.

·       Technology spending up 24%.

·       Non-staff costs rising at the fastest rate recorded in 20 years.

·       Total industry costs hit £7.96bn, growing nearly 2% faster than revenue.

We need to face facts: you can grow your top line every single year, but if your cost base grows faster, you’re not scaling; you’re treading water

And the firms feeling this most acutely are often not the smallest ones. Some of the largest firms in this industry, household names with billions under management, are operating on margins below 10% or incurring losses.

Financing the future while hedging your bets

The return on investment in technology, in people and in marketing is real and evidenced, but the timing is simply awful. You have to spend before you see the return. And in an industry where margins are already under pressure, that takes nerve and strong leadership.

While many firms will continue to resort to cutting, my recent experience has shown me that the firms preparing to scale and ready to take risks are those investing in the right things. They’re doing it early enough and consistently enough to try to build a business that grows faster than its costs. And it's that the fundamentally different strategic mindset from the one most of our industry currently operates with.

The finding that will concern every leader:

Of all the data in this report, the asset flow numbers are the ones likely to be nagging you over your morning Costa.  

In 2024, wealth managers saw record inflows of £222bn. They also saw record outflows of £123bn.

And therein lies the rub: most of that outflow wasn't clients leaving the industry, it was clients leaving firms. Moving between providers, spreading their wealth and shopping around. Ouch.

The era of the loyal, long-term wealth management client, the one who came via a referral, stayed for decades and never really questioned whether they were getting value, is quietly ending.

Clients are more informed, more mobile and more demanding than ever before. They are making active choices about who manages their money, and they are not staying out of habit. For those of us responsible for brand, client experience and communication, this is the most consequential number in the entire report.

Retention can no longer be assumed. It has to be earned continuously, at every touchpoint and through every interaction.

The CMO’s moment and why it matters more than the numbers suggest

As a CMO in wealth, I'll admit I read the marketing section of this report with particular interest. And for the first time in years, I found myself genuinely encouraged.

·       Marketing spend among wealth managers rose by 29% in non-staff costs.

·       Marketing headcount grew by 7.4%, one of the fastest-growing departments in the industry.

·       Firms are beginning to invest in brand awareness, in-house marketing teams and channels beyond the traditional referral network.

This is a meaningful shift because, when it’s done right, marketing is an incredible growth driver, but the report is honest about the fact that we’re still catching up. And when you look at what we're catching up to, the scale of the challenge becomes clear.

Execution-only stockbrokers are now advertising on prime-time TV; they’re actively targeting high-net-worth individuals and making a compelling case that they don't need professional advice to invest well. New XO accounts opened in 2024 hit 744,081, up 67% year on year. These platforms are no longer just competing for mass market investors; they’re coming for our clients.

The competitive threat is already here

In a market where clients move more freely, where competition is more visible and more aggressive, and where trust is harder to build and easier to lose, the firms that invest in making their value genuinely visible will have a significant advantage over those that don't.

The link between technology investment and productivity is already there in the data. The same logic applies to marketing investment and growth. You don't see the return immediately. But firms that don't make that investment now will feel its absence acutely in three to five years.

And given what we now know about scalability, growing revenue is not enough if costs grow faster; marketing becomes even more strategically important. Because organic growth, driven by brand and client experience, is one of the few levers that can improve both the top line and the margin simultaneously.

I know from experience as a CMO in wealth that marketing doesn't just bring in revenue; it brings in the right revenue from the right clients at the right cost.

What does all this mean for those of us in wealth management?

The UK wealth management industry is resilient, innovative and, on balance, in pretty good health. The long-term fundamentals remain highly attractive: an ageing population, trillions sitting in cash savings accounts yet to be invested, and growing demand for integrated financial planning.

But times are changing, and fast. The conditions that allowed firms to grow comfortably on the back of rising markets, strong interest income and loyal client bases are shifting. The cost environment is tougher, and the competitive landscape is more crowded. Scalability is proving elusive for almost every type of firm, and clients are making more active, more informed decisions about where they place their trust.

The firms that stand out in the next chapter of this industry won't just be the ones with the strongest investment performance. They'll be the ones who understood, early enough to act on it, that in a market defined by mobility, transparency and choice, being excellent is no longer sufficient.

You also have to be known, trusted and ultimately, chosen. The question isn't whether your firm understands that, it's whether you're moving fast enough to act on it.