On the occasion of the latest CEO dinner organised by PAM, Objectway discussed some of the most pressing challenges faced by the industry. Topics ranged from how the industry is managing the increasing demand for improved digital engagement as part of an integrated hybrid experience – with consumer duty in mind -, the constant challenges of improving productivity and achieving scale, and what a successful future operating model may look like.

The debate provided a rich and diverse exchange of ideas; it emerged that most firms in the industry are undergoing change and using digital technology to enable improvements by simplifying the current legacy architecture while also attempting to future proof the business. An example of this is the desire to create an open scalable platform which will make it easier to introduce new offerings or services, reducing the need for constant major IT changes and enabling more nimble adaptation to changing market demands.

Digital change was also assessed as improving productivity and efficiency within firms. For instance, the front office wanted to be able to receive real time alerts on dashboards which could help prioritise tasks. They also hope to automate many manual processes, freeing up time for more strategic and valuable activities. The sentiment is supported by industry research that already shows a positive correlation between increased IT spend on front office and profitability.

What will the future look like for the wealth management industry?

The near future signals the first deadline for implementation of consumer duty and there was agreement that client outcomes related to ‘consumer understanding’, ‘price and value’ etc are positive for the industry. There may need to be some changes made around this.

One will be ensuring that there is a clear omni channel approach to communications and relevant tailored support available for clients. Digital channels undoubtedly play a major role in this.

On the investment side, the group discussed the role of sustainability, ESG and how this would be reflected in future reporting as clients increasingly want to see their portfolios doing well in every sense of the word.

Operationally, firms are looking to leverage the flexibility and scale of cloud offerings and the group debated how they could offer a personalised service with their own unique touch in a scalable way. Do firms need to build their own software when technology partners are able to configure workflows for them with software that is upgraded and kept in line with changing regulations to industry standard? Ideally, CEOs would like to focus on what they do best- managing client relationships and money and leaving the rest to trusted partners. This seems to be the direction of travel and could/should be speeded up.

As ever, the mood within the group was very positive and looking forward to a future where clients would enjoy a more personalised omni channel experience and firms would be enabled to achieve greater efficiency and scale.