The Future of Wealth Management


The Future of Wealth Management

Can you teach an old industry new tricks?

Historically, wealth management has always been somewhat resistant to excessive change. With many of the world’s largest firms dating back as far as the 1800s, this is hardly surprising – after all, if it ain’t broke, don’t fix it.

However, even the oldest and most stubborn wealth firms have found themselves forced to take notice of the digital revolution currently taking place in their sector. While the industry giants have been preoccupied with business as usual, smaller, tech-focused firms have quietly set up shop – and the disruptive effect this has had on the wealth management industry as a whole is undeniable.

One of the biggest innovations in wealth management is, without question, the massively increased importance of mobile applications. Now more than ever, older and more well-established wealth management firms are recognising how essential it is to provide their clients with a sophisticated and comprehensive yet simple mobile interface in order to avoid being pushed aside, in favour of younger firms who have been providing mobile services since they started.

This change in attitudes can’t come fast enough. In 2016, PWC reported that 69% of High Net Worth Individuals (HNWIs) were using online/mobile banking services, but at that point only 25% of all wealth managers were working with their clients through any other digital channels besides email. Fast forward 2 years, and it seems as though many firms are still being slow to adopt these new tools. A piece of research conducted this year by Thomson Reuters and Forbes claimed that only 27% of wealth managers currently have and are satisfied with their mobile product offering, despite being aware that this is the digital capability most highly prized by their clients.

The consequences of dragging one’s heels could potentially be severe. A recent survey by Ernst & Young found that a 59% majority of wealth clients state that digital will be their preferred channel for receiving advice within the next few years, meaning that firms who are too slow to adopt digital practices can expect to lose a great deal of business in a very short amount of time.

Having dedicated and well-designed mobile application services is something that every wealth manager is going to have to look into if they wish not to get swept away by the digital current. Providing these services greatly benefits firms – not just from a client acquisition or retention perspective, but also by increasing client engagement. Providing clients with the ability to see the status of their assets and to interact with wealth managers in real-time lowers the barriers to entry and puts more power in their hands. This in turn increases their confidence in the wealth manager’s brand, their understanding of their current wealth situation, and ultimately, their willingness to invest. Research by McKinsey & Company found that clients who were able to engage with their wealth manager through a mobile medium (such as a mobile website or app) were 3.5 times more likely to move assets than clients who primarily relied on other channels such as email. With all this in mind, it’s not exactly hard to see why mobile has become such a must-have for wealth managers, and why newer and smaller firms whose services are almost entirely app-focused are finding so much success in such a competitive and complicated space.

However, mobile services aren’t the only change causing disruption to the way wealth managers operate and interact with their clients. More and more firms are recognising the benefits of investing in Robo-Advisor technology – and the response from clients has been extremely positive. Ernst & Young’s report revealed that the majority of wealth clients were likely to embrace robotic wealth management technology – in particular those aged between 18 and 34, where 61% said they would be open to considering robo-advisors. Most interestingly, the same report also found that openness to robo-advisor technology was at its highest among HNWIs, and not (as one might reasonably assume) less high-value ‘affluent’ clients. 70% of HNWIs stated that they would consider robo-advice. This obviously represents a substantial and extremely valuable segment of the wealth management client base who are ready, willing and waiting to reap the benefits of the digital revolution.

There can therefore be no doubt whatsoever in anyone’s mind – if wealth managers want to stay competitive, they need to go digital. However, this may be far easier said than done. The Thomson Reuters/Forbes piece revealed that 68% of wealth managers regard learning about and keeping up with new technology as their biggest current challenge, while 69% reported concerns about how best to stay relevant to younger investors.

Although there is no one simple way to speed up firms’ adoption of digital solutions and processes, one thing that will certainly help to make the transition easier is hiring the right people. Huge technological overhauls like the one currently looming over the financial industry require some of the very best talent across a variety of job functions, ranging from Software Developers and Infrastructure Engineers to Project Managers and Agile Scrum Masters. There has been a surge in demand for absolutely top-of-the-pile technological talent in the financial sector, and this can only be expected to increase as those in charge become more and more aware of just how vital digitalisation is.

Business transformations aren’t done overnight – they take time, effort and a whole lot of trial and error. However, ensuring that you have a technology team who are ready, able and equipped to undertake such a daunting task is the first step to ensuring your firm stays on top. To say ‘digital is the future’ is to do it a disservice. Digital is very much the present, and firms with a strategy already in place are pulling ahead of their competition.

Saragossa are a talent provider specialising in the Financial Technology, Financial Operations and Data Science sectors. Our role is to match clients with high calibre candidates. Our work encompasses filling temporary contracts along with building permanent teams and resourcing projects. To find out more, please contact or call 020 7871 3666.

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