But many won't be able to handle growth unless they get HR issues sorted out. PricewaterhouseCoopers' 2007 survey of the global wealth-management industry may paint a picture of go-go growth for private banks and high-net-worth advisories, but it also outlines a series of new challenges industries practitioners will have to come to terms with.

"The 2007 PricewaterhouseCoopers survey reveals a period of unprecedented opportunities for wealth managers," says Bruce Weatherill, head of PwC's private-banking and wealth-management leader practice. "Buoyed by rising global wealth, private banks and wealth managers everywhere are anticipating extremely high rates of profitable growth that have not been seen during the 14-year history of this survey or probably at any other time."

Overall, wealth-firm CEOs seem wildly optimistic about growth prospects: 97% of them predicted continued prosperity for their firms over the next three years. They saw industry-wide assets under management growing 23% every year through 2009, with the rate of growth for individual client accounts increasing more sharply among the ultra high net worth.

Thanks to me -- I mean us

Most of these wealth managers said the predicted growth will come on the back of rising levels of client service at their firms. In other words they see it coming as a result of their own sagacity and hard work rather than things more generally associated with growth in the wealth-management space such as expanding economies and more affluent populations.

The renewed focus on clients is having an impact on business models as wealth managers move to position themselves as confidantes and "trusted" advisors rather than financial planner and investment-product gatekeepers.

In turn, wealth managers say they're willing to spend more on technology to revamp systems and processes in an attempt to increases efficiencies as they improve client service. (As the Boston-based consultancy Aite points out in a recent examination of advisor-platform integration, having client-service gizmos at hand doesn't ensure operational efficiency.)

Though wealth-management firms responded to PwC with predictions of growth, the survey says that increasing costs, regulatory pressure of and -- especially outside the U.S. -- more stringent corporate reporting requirements puts in question how much of that will go to the bottom line.

Wealth-management firms "have some hard choices to make in order to achieve their growth ambitions," says Weatherill. "This is a time when strategic choices have to be made and finite resources have to be focused on serving existing clients as well as supporting highly ambitious growth plans."

For this year's survey PwC polled about 265 organizations -- twice as many as last year. This broader-base sampling includes more respondents than ever from wealth managers in emerging markets like Brazil, India, Singapore, and ex-Communist eastern Europe.

In fact much of the growth wealth managers are seeing globally is expect to coming from developing countries, where wealth managers have added an average of 28% more clients and 34% more assets last year.

Firms need new faces

More than half of the wealth-firm CEOs surveyed said they were planning to begin new operations in such markets over the next two years, especially in so-called BRIC (Brazil, Russia, India and China) markets.

But PwC sees competition for trained, culture-savvy wealth professionals in these markets growing fiercer in coming years. And anyone who paid attention to the "advisor wars" in Singapore over the past year might agree.

"The issue of scarce resources is also of fundamental importance" in the context of firms' responses to "the fast emergence of wealth management in developing countries," says Weatherill. "Client-relationship managers are in exceptionally short supply, so the issue arises: how can organizations make best use of their most talented people?"

The answer, in all probability, will come in the form of a new kind of client-relationship manager. The type of client-relationship manager most of the wealth-management industry employ now are comparative lightweights -- a system that PwC says "is under severe strain and [in need of] re-engineering."

Only 17% of the wealth-firm leaders PwC surveyed thought that their existing relationship managers have the skills required to meet their clients' increasingly exacting needs. Only a quarter of them said they were "very confident" about their abilities to hire a sufficient number of relationship managers to match their business plans and growth prospects over the next three years.

Yet the survey suggests that wealth-management firms will increase the number of relationship managers they employ by 32% -- 57% in Asia. And of course that raises the question of what sort of people these firms will be hiring to deal directly with their clients.

"Retaining and recruiting new [relationship managers] is critical to success," according to the PwC report. "Improving their skills and capabilities is essential for meeting clients' needs." -FWR

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