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GEN 25, 2022

Outperforming in 2022: Is the wind of change blowing in Wealth Management?

Marianna Vilardi


Reading time: 2 min


The Wealth Management industry was already undergoing an exponential transformation in the previous years. 2021, probably more than any others, was populated by highly potentially reshaping drivers that consolidated the holdover changes witnessed in 2020, made them somehow permanent, turned them into a basis for a long-term strategy to rebuild than a short-term tactic to react.

Now that we prepare ourselves to face the next, upcoming challenges of 2022 some questions arise. Will digital transformation still be pivotal? What’s going to happen with ESG investing? Will client relationships continue to benefit from hybrid models of advice? Or will other approaches originate?

Hard to say in the blink of an eye. But the answer is there is no answer. The only thing certain is that trends will never stop popping out and the overall industry will need to be ready to catch them.

Don’t call off the Hybrid Model, it’s the key!

Because the client is the key player of your environment, then providing the client with the service he seeks, in the exact way he wants it, it’s more than fundamental, it’s vital.

Hybrid models of managing client relationships forcibly developed during and after the pandemic boom and effectively showed to perform, this way becoming firmly established. In a world that is now slowly coming out of the all-remote solution, but without ever abandoning it for good, keeping up with those hybrid models for advising clients seems like the rightest opportunity to seize in 2022.

Fact is that Robo-Advisor is still at the forefront of the investing horizon, given its advantages in terms of cost reduction and the ability to well design investment portfolios. However, the technology-only route seems not to work, holistically speaking, and many clients’ confidence in their investments still goes through a personal relationship. This was true long before the advent of the pandemic.

Covid19 blurred it all out. In fact, if on one hand the pandemic has accelerated digitalisation as the new paradigm to interface with clients, on the other hand, a zero-personal relationships scenario has emphasised their very importance. And people require them back. Clients nowadays deeply research that Human2Human logic in their daily activities, that personal relationship that gives them comfort in their investment decisions.

The challenge is therefore now double. Wealth managers will be demanded to increasingly find a balance between both worlds and simultaneously enhance the virtual client experience, looking for ways to differentiate themselves, through online customer engagement and branding excellence.

A massive security challenge lies ahead

The great challenge of digitalisation is that it created new dimensions of value – it made data increasingly available, it allowed advisors and clients to keep feeding their relationship and interact with one another more easily – however, it does not come with benefits only. A relentlessly agile and hype-connected world poses the biggest threats for to organisation’s security.

As a consequence, and also due to acquisitions, companies will be facing a great security challenge in the new year – with a massive investment in FinTech cybersecurity – building a more resilient, forward-thinking security strategy, as the number of data possessed and prone to attacks increase.

Spending in the RegTech sector, in particular, is expected to increase dramatically in 2022. Here, the combination of technology and regulation improves data protection and cybersecurity, also thanks to services such as hybrid cloud computing, cryptography, cloud security, advanced authentication etc. providing more modern and accurate tools to prevent fraudulent behaviours.