2012 Americas wealth management study
Latin America opportunities
Although most of our survey findings are applicable to the entire hemisphere, the Latin American wealth management market has several unique attributes.
The market is smaller than the North American market, but it is growing quickly. Firms face the appealing prospect of expanding their businesses significantly—and the challenge of doing so in an economically feasible manner.
Compared to their North American counterparts, Latin American wealth managers spend a larger proportion of their operating budgets on trading support, trade order management and certain overhead-related costs. This allocation may come at the expense of client service support and investment management outlays.
Latin American firms are smaller, and because large IT investments are often not economically feasible, this has led to a higher penetration of proprietary applications. Firms often develop local solutions, with many of them leveraging end-user computing tools such as Microsoft Excel and Access.
Technology organization structure
Very few Latin American wealth managers can justify a dedicated IT organization. IT support is typically shared with other business units, although business growth could shift this shared-service model toward a more hybrid structure.
Product and client strategy
Faster market growth and more demanding clients compel Latin American firms to focus on expanding their product and advisor bases.
Strategic technology spending
While North American firms focus on improving the client/advisor experience, Latin American wealth managers focus more on growth in new products and markets. Also, Latin American firms spend approximately one-third less than North American firms on regulatory and compliance issues.
Offshoring and near-shoring
Nearly two-thirds of Latin American firms rely on off- or near-shore facilities to service clients, with the majority rating these services as highly effective.