Clients don’t necessarily want more—they want better, according to the report from the Boston Consulting Group.

Anna Zakrzewski, a BCG managing director and partner, coauthor of the report, said: “As digitization lowers barriers to entry to wealth management as a business, competition will intensify and offerings that once provided differentiation will face commoditization.”

In the report, BCG outlined three potential scenarios for post-COVID-19 growth: “quick rebound,” “slow recovery,” and “lasting damage.”

The report said that regardless of which scenario emerges, wealth management providers are likely to face more pressure, and many of them were already in challenging positions before COVID-19.

The report also said that client needs and expectations are changing at an accelerated pace, competition is intensifying, and cost-to-income ratios have been significantly higher than prior to the previous financial crisis (77% in 2018 compared with 60% in 2007).

Although some wealth management providers have made advances in recent years in adapting their businesses to the changing environment, the report said that nearly all still have considerable work to do.

BCG’s recommended agenda for wealth management companies featured three key imperatives:

Protect the bottom line by pursuing smart revenue uplift, optimizing the front-office setup, streamlining compliance and risk-management processes, and improving structural efficiency.

Win the future by developing more-personalized value propositions, enhancing ESG and impact-investment offerings, designing challenger plays, and leveraging ecosystems and M&A.

Build capabilities by gaining better client understanding, attracting top talent, investing in digital and data, and designing a state-of-the-art technology platform.