Wealth management firms in the Channel Islands have been encouraged to consider improving access to alternatives and targeting technology investment amid slowing real-terms growth.

PwC’s Channel Islands Wealth Management Insights 2025 report noted that while fund levels were increasing strongly in absolute terms, stripping out the uplift from inflation or rising asset prices highlighted more modest growth in recent years.

Furthermore, the expansion in client numbers was found to have tailed off over the past two years.

This emphasised the importance of looking beyond core markets for new sources of value, differentiation, and growth, the report stated.

With real-terms growth increasingly hard to achieve, PwC argued that offering access to alternative investments can help wealth managers stand out from the crowd and improve client returns.

It warned that many clients may switch to wealth managers who move early to bring alternative assets into their portfolios, and there was an opportunity to increase share of wallet.

Furthermore, clients were increasingly expecting tech-enhanced capabilities, and wealth management firms will have to balance harnessing new technology and meeting client demands with what can be significant investment costs.

Trusts remained the largest revenue generator for wealth managers in the Channel Islands, making up more than half of clients and 70 per cent of assets under management (AUM), with an average mandate of £3.2m.

Meanwhile, private clients accounted for around a quarter of AUM and 20 per cent of clients, with an average mandate of £1.3m.

The Channel Islands wealth management industry's confidence has improved overall since last year, although this optimism begins to dip when wealth managers look to 2030 and beyond.

When asked about the top three factors that would improve the international competitiveness of Channel Islands firms, attracting high net worth individuals (HNWI) to the islands topped the list, followed by greater international promotion of the benefits of using the islands for wealth management, and attracting people to the islands to work in the industry.

“Encouragingly, the wealth managers in our latest survey are more optimistic than they were a year ago, especially about their prospects for the coming 12 months,” said PwC Channel Islands director and Jersey banking leader, Ian Ross.

“Yet this confidence begins to recede as they look further ahead. The cautious outlook is unsurprising at a time of heightened macroeconomic uncertainty and disruption, as well as the changing political landscape.

“The tentative sentiment may also stem from a realisation of just how much transformation is needed to stay relevant and competitive in an international wealth management market that’s being remade in real-time.

“The most pressing questions centre on whether wealth managers are moving far and fast enough to keep pace with shifting investor expectations – demand for greater diversification and potentially higher yielding alternative investments in particular.

“Getting ahead of the pack by offering alternative investments is therefore an opportunity to enlarge the share of wallet from existing clients and attract new business both locally and internationally.”

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