Objectway discussed the state of the industry and how technology will enable change in wealth management at the recent CEO dinner organised by PAM. Many topics were debated ranging from how the industry may need to cope with the spectre of falling markets – after many years of record revenues and growth -, the increasing demand for improved digital engagement as part of an hybrid experienceintegrated from clients, and the perennial need to update systems to enable scalability– a metric which eludes most firms if measured year on year.
There was considerable optimism within the group with regards to changes which will deliver a positive impact; most firms are already well underway with their digital change agenda and have highlighted their priorities for the coming 12 months. These include changing and upgrading legacy systems with an emphasis of integrating them into the current architecture but also with a keen eye on future proofing the business. An example of this is the desire to create an open scalable platform which will make it much easier to introduce new offerings or services without the need for constant major IT changes. Another priority is improving client portals to allow for real time access of tailored information on any device at anytime. Indeed, client service is a real differentiator between firms and a major driver of referrals which are still one of the most effective ways that firms grow in our industry.
Interestingly, the group had mixed views on the burden of regulation and how much this sucks up resource and costs. On the whole, everyone agreed for the need of sensible regulation to protect clients however there was also a view that the regulation is often over engineered and aimed for a retail client market which isn’t always applicable to wealth management clients.
As a result, clients are also frustrated at having to constantly fill out paperwork to adhere to mandatory regulatory reviews. The group acknowledged that automation in the front office and real time risk alerts had certainly made life easier for Investment managers in terms of administrative burden and some elements of self service on client portals would do the same for clients.
Overall, there is much to be done to improve key metrics in wealth management and CEOs are braced for a potentially bumpy ride in the times ahead but very positive on the general outlook for the industry and how technology can enable positive change.