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Trends and key themes in sustainable innovation in wealth

Roger Portnoy

Chief Strategy Advisor for Objectway


Good day, my name is Roger Portnoy, and I am the Chief Strategy Advisor for Objectway. Today’s podcast covers some key trends and themes in wealth management, and particularly captures the role of sustainable innovation in the client experience. This will be a major area of focus in our upcoming summit in Venice in April and represents an important evolution in the way that Objectway and its clients will seek to utilize emerging technologies and new business models to deliver great outcomes for advisors, relationship bankers, and end clients in 2023 and beyond.

As a starting point, I believe this year will see the continued convergence of sustainability with emerging technology innovation in wealth management. While the macro environment is likely to remain challenging, especially in the first half of the year due to rising unemployment and high core inflation, we see strategic investment persisting in areas that reinforce a firm’s commitment to client outcomes in a holistic way as well as reinforce the alignment of a firm’s and client values as they relate to the environment, social justice and governance.

The areas where I expect to see continued investment and strategic focus feature a blend of technology and service innovation. They will of course be client focused, and holistic. They will more commonly be deployed within the cloud and use cognitive services. I see the outcomes they deliver reshaping digital advice, supporting the advancement of personalization in investment solution design. I also expect them to increasingly find ways of using embedded apps to support operational transformation, reducing both cost and friction. Finally, sustainable innovation will, I am happy to add, encourage more wealth democratization, while expanding access to alternatives.

I also expect this year to represent a leap in the presence of AI in the client experience and its continuous interaction with content management. I also expect to see AI feature more as a tool for business process automation, and smarter application interfaces. It is at last possible to see a back office where AI enabled systems and Lo code/no code frameworks reduce both complexity and time to market for solutions that rely on an integration of one or more of these technologies.

As far as the evolution of application use cases are concerned, relationship managers will be presented with more opportunities to retain, grow and enhance their asset and household reach. In our experience, firms that start to experiment and deploy emerging technology and new tech frameworks early get themselves in a better place to demonstrate to clients their intergenerational practice management capabilities and the improved risk/reward frameworks this approach demands. We expect leading firms, as a result, winning more mandates to service a diverse pool of household assets, and creating broader investment relationships with earlier wealth builders within this structure.

We also see operational leadership in wealth firms continuing on a mission to further tackle and reduce the high-level friction points in client engagement. Firms know they need to both accelerate the on-boarding of new clients, as well as the flow of assets into different underlying mandates for savings, investment and retirement. The path to achieving this, in my opinion, is through using reg tech solutions embedded directly into the customer journey. Developers in wealth firms will this year increasingly leverage apis via lo code/no code systems leading to increased straight through processing for a larger array of client types and on-boarding situations. I believe firms that do this well acquire assets faster, improve their monitoring of high-risk chokepoints, and achieve higher level of client satisfaction.

The ever-changing regulatory landscape and the increasing need to build applications that adjust to client vulnerabilities, as I see it, will lead to further investment in personalized investment solutions and new types of decision support tools. We expect to see richer client profiles at the heart of this and expand further to properly accommodate sustainability preferences, as well as client knowledge and experience.

At long last, this will see the wealth management industry demonstrate greater accountability to improve client financial literacy, even while presenting portfolio designs and practices that are simpler and more automated. We see the net result as an evolving offering of investment solutions more accurately aligned to sustainability requirements coupled with personalized education and decision support tools.

These developments will be part, as I see it, of the continued evolution of the hybrid advisory model and the role of client facing technologies to achieve this. The impact of the pandemic isn’t going away, and will continue to shape how firms engage, and collaborate via both digital first and human led approaches. We expect this to be revealed more often in 2023 as a unique mix of “human and technology”. The client portal will play an ever-increasing role in achieving this providing the most secure way for firms to collaborate with clients and their trusted advisors. Through the portal, I am expecting firms to deliver enhanced decision support tools, influenced by critical data and analytics that reflect client sentiment, and satisfaction. We see firms that execute this well improving their opportunity to expand the size and breadth of their client base, quantify the value of their client service functions, and enhance their behavioural understanding of their clients.

In Conclusion, I see exciting times ahead for client engagement and lifecycle management and the critical technologies and services that shape it. 2023 promises to be a significant year for the evolution of the front office, and one where investment to improve the client experience has the potential to not only improve client satisfaction, but also the economic and social outcomes for both the firm and each individual that it serves.

My colleagues and I look forward to seeing you at Venice, and sharing the conversation with you on your sustainable innovation program.