Despite the challenges wealth management firms around the world face because of regulatory changes, the 2013 World Wealth Report released on Tuesday suggests that the firms that act strategically to turn those difficulties into opportunities stand to come out ahead of the competition.

“The impact [of the regulatory environment] is very high, has never been higher,” said David Wilson, head of Strategic Analysis Group, Capgemini, Financial Services, “and is only likely to increase in years to come having significant impact on firms whether they have global, regional or even local operations.”

As a result of recent changes to regulations, wealth management firms face having to consolidate and an increase in costs, said Wilson at a news conference in Toronto detailing the study’s results. As well, the regulatory changes have several negative implications for clients, such as overly burdensome administration during the “onboarding” process.

Despite these challenges, wealth management firms also face several opportunities, according to Wilson.

“Everyone has to make investments to be compliant,” said Wilson. “It’s how you then leverage that as a catalyst for something more, both for yourself as a firm and also adding value for the client.”

The report outlines three broad areas for wealth management firms to focus on. The area, “Technology and Process,” includes making improvements in client segmentation, reporting, risk management and digital communication opportunities.

The second division is called “People and Culture.” To be successful in the new regulatory environment, according to the report, wealth management firms must focus on training and hiring experienced wealth managers and staff members who are placed at all levels of the company.

“Despite the recommendations around [automating some processes] these individuals will also have to make numerous judgement calls,” says Wilson, “and so you need to have experienced individuals in the middle and back office as well.”

The final section listed in the report is “Communications.” Wealth management teams that will stand out in the new regulatory environment, according to the report, will have a clear outline of their value proposition, cost of services, and Know-Your-Client and anti-money laundering requirements.

The annual report is a joint venture by RBC Wealth Management and Capgemini, a global consulting firm.

The study is comprised of surveys of over 4,400 high-net worth individuals in 21 markets in North American, Latin America, Europe, Asia-Pacific, Middle East and Africa and interviews of 60 wealth management firms.

The survey classifies a high-net worth individual as someone with a US$1 million or more in investible assets.