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Collaborate to compete
As we enter this era of strategic partnerships, it is worth reflecting on how we got here. In the decades gone by, size and scale were of most value, with the focus squarely on competition among different firms.
Then came a period marked by regulatory shifts, digital disruption, and changing client expectations and market dynamics, setting the stage for what we are seeing today.
However, it was disruption caused by the COVID-19 pandemic that accelerated the shift to where we are now. The emphasis has shifted from competition to collaboration – whether it involves working with FinTechs, platforms, or even peers. Strategic partnerships are now central to how firms operate and innovate.
Partnerships are reshaping the wealth and asset management sector across three strategic focus areas: customer centricity, profitability and best-in-class capabilities. These are no longer standalone goals – they are interconnected outcomes that firms must pursue simultaneously through collaborative models.
The message to wealth and asset managers is clear: to remain competitive and unlock value for all stakeholders, they must rethink their traditional value propositions. This includes forming smarter alliances, exploring co-investment opportunities and aligning business priorities with a more agile, partnership-driven approach.
As a result, business models and lines are blurring as different firms come together to create a unique, value-driven ecosystem.
Bring in what you need, when you need it
I am increasingly seeing wealth and asset managers bringing in partners to enable tech transformation involving data modernization and artificial intelligence (AI) implementation, regulations and risk-related transformation – and even tax transformation where wealth and asset managers are outsourcing tax reporting work they would previously have done in-house. I am also seeing an increase in firms seeking advice on everything from internal strategy to external mergers and acquisitions (M&A). Wealth and asset managers have recognized that if a peer firm has a niche skillset that is industry leading, it is beneficial to partner with them instead of building those capabilities from scratch. Real strength lies in these intentional collaborations.
And this shift is not only about operational efficiency – it reflects a broader redefinition of how firms deliver value in a more dynamic, client-focused and innovation-led environment. The EY-Parthenon CEO Outlook Survey January 2025 found that around two-thirds of CEOs expect to pursue joint ventures or strategic alliances this year, not just to scale but to share risk and accelerate innovation.
Leaning into what you do best
While scale remains relevant, differentiation is now paramount. Firms should ask: how do we stand out and deliver value to our clients in a way that only we can? It is about leaning into what you do best. And rather than diluting your ability to differentiate, partnerships can free you up to focus on your unique strengths.
The rules of the game have changed. The winners in this new era will be those that embrace transformation and build differentiated value propositions that resonate across the client spectrum – with partnerships at the heart of everything.