In a context where the private wealth management industry is growing at double digits, Latin America stands out. The region is seeing a particularly strong expansion rate according to Boston Consulting Group (BCG), driven by the appreciation of regional currencies and a variety of business-related factors—a momentum that currently shows forward projections.
“Latin America stood out for its growth,” emphasizes Federico Muxi, Managing Director & Senior Partner at the consulting firm, in an interview with Funds Society. As part of the firm’s Global Wealth Report, they estimated that the region saw a growth of 17.7% in 2025, measured in dollars. In contrast, the global industry grew by 10.7% during that same period.
What explains this? On one hand, there is the currency dynamic. “A good portion of this growth—roughly half—occurred because many of the main Latin American currencies appreciated against the dollar last year,” indicates the executive, who leads BCG’s financial institutions practice in Iberia and South America. This is the case, he explains, for the currencies of several major regional economies, including the Brazilian real, the Mexican peso, the Chilean peso, the Colombian peso, and the Peruvian sol.
The other half of last year’s boom comes from the dynamism of the economies, the savings rate they generate, and the evolution of local capital markets. “If you look at market performance over the last year, it was very good. And this year it is being replicated as well,” notes the executive, citing strong gains in stock markets that appreciate wealth.
“Despite geopolitical uncertainty and rising inflation in some markets, exacerbated by the increase in oil prices, the markets have still not adjusted and continue to show very good yields,” he adds.
A More Sophisticated Local Offering
Muxi highlights Brazil and Mexico as the hubs of greatest growth in terms of absolute volume. Regarding sophistication—including variables such as industry competitiveness and investment firm capabilities—he highlights Brazil and Chile.
Along those lines, Muxi attributes these dynamics to an economic context favorable to the business. “These are economies that have been very stable for quite some time, with good returns on local currency investments—especially in Brazil—and when that happens, a virtuous cycle is created,” he explains.
In a context where the trend is moving toward offshore investments—a trend established in the industry globally—these characteristics favor the local development of the business. Macroeconomic stability and legal certainty bring more local investments compared to offshore hubs, comments the BCG executive, which incentivizes the development of a more competitive local advisory offering. At the same time, this sophistication brings more onshore investments.
To illustrate, Muxi points out that the percentage of total financial wealth—including pension funds—held offshore reaches only 9% in Chile and 11% in Brazil. In contrast, that figure reaches 70% in cases like Argentina.
An Expanding Investor Base
Another trend that has favored the boom in the region’s wealth management business, according to the consulting firm, is the greater variety of wealth the industry is capturing. Aligning with a global trend, BCG has seen many players targeting sectors that have traditionally been underserved by major international financial advisory firms.
“Global banks, which have high compliance costs and Know Your Customer requirements, have typically pulled back in recent years to focus on the Ultra High Net Worth segment of 5 million dollars and above,” Muxi explains. This focus leaves wealth between 500,000 and 1 million dollars seeking services elsewhere.
This presents an opportunity for onshore segment players, who tend to be closer to these clients and can generally better leverage commercial banking—often as part of the same financial groups—as well as for new players, such as B2B2C platforms that channel independent wealth managers. “That is a super relevant phenomenon in the region and one of growing size,” Muxi indicates.
Looking ahead, this phenomenon is expected to keep driving the industry forward, he notes, albeit with questions around the impact of artificial intelligence and how various local players will adopt the technology.
Good Prospects for the Region
Moving forward, BCG sees a favorable context for the industry to continue developing in Latin America. “This is an industry that is always exposed to macroeconomic growth, savings rates, and how markets evolve,” Muxi emphasizes. Therefore, if markets continue to perform as they have in recent years, high growth in the industry will persist.
“In general, we are positive about the growth of wealth,” notes the professional. The firm is projecting a compound annual growth rate (CAGR) of between 7% and 10% for various countries in the region over the next five years. This spectrum places Chile at the higher end of the expansion range and Colombia closer to the bottom. “But with good prospects overall for the region,” he stresses.
In any case, this future dynamic will depend on factors such as macroeconomic stability and legal certainty in each country, which favor wealth management development and onshore investments.
In that regard, a potential challenge facing the industry relates to financial markets. Considering the heavy bet investors are making on artificial intelligence, an adjustment in international markets—as posited by those who see an AI bubble—would impact the industry. “It is a super relevant factor,” in Muxi’s words.
The Margin Challenge
On the structural side, another challenging aspect is the trend of narrowing margins in the private wealth business. “Margins have historically compressed because we are moving, like all businesses, toward a world with greater transparency,” which translates to clients being more conscious of fees, he explains. Additionally, various countries have introduced regulations regarding industry compensation.
“Fees, and thus industry revenues, fall gradually over time,” notes the BCG executive, while on the other side, costs remain relatively stable.
The general trend in the industry is for firms to cut front-office costs through technology and efficiency efforts. However, this is offset by rising back-office costs, which include investments in technology and compliance.
“The end result is slightly declining revenue and relatively stable costs,” Muxi highlights, leading to a slight compression of margins.
Even so, he emphasizes that it remains a profitable business with a model that generates revenue without deploying capital, and with low credit risk. “This is a business that, even with slightly compressed margins, remains super attractive for all players,” he stresses.
