By PwC

The world’s Asset & Wealth Management (AWM) industry has turned its eyes to the Latin American (LatAm) region, with many fund managers looking for growth in the burgeoning market. However, the fabric underlying the industry is set to be upended in the coming years as new clients enter the space and the existing, bank dominated, distribution model begins to face challenges as clients look for new, and cheaper, ways of buying products.

While economic uncertainty in the region is rife, the largest markets, Brazil, Mexico and Chile, continue to see sustained growth – with others in the region becoming more prominent, such as Peru or Colombia. We forecast that by 2025 assets under management (AuM) in LatAm will reach US$5.3 trillion, up from US$2.4 trillion in 2018. This growth is expected to pick-up pace post 2020 as the United States quantitative easing program picks up steam and currencies in the region strengthen against the dollar. However, obstacles, including a low savings rate, political instability and inadequate investor education challenge the future growth potential of the region. Global trends have begun to affect the LatAm industry, including shifting demographics and client preferences, increasing regulatory burdens and the rapid rise of automation. Falling interest rates have also begun to propel institutional investors, like pension funds, away from bonds into equity and, especially, alternatives as they look to diversify their portfolios and increase their yield. Pension funds are also increasingly looking outside their borders and regulators have responded by upping foreign investment limits

Get the book here