JANUARY 15, 2021

The Wealth Management Firm of 2025

Alexander Cassar

Chief Business Operation Officer

Reading time: 2 min


Last thursday I attended a networking event in London hosted by Objectway. The theme was to help define “The Wealth Management Firm of 2025”. The participants represented the crème-de-la-crème of the UK wealth management/private banking industry, providing more than 3000 jobs, a staggering £105 billion assets under management and combined revenues of £770 million as of 2018.

As the evening progressed, I had the pleasure to exchange views with my fellow peers on:

How we can bring financial planning to the forefront. There was common consensus that financial planning has become a mainstream service becoming the focal point for both clients and private wealth firms. What I scribbled on my note pad was the challenge UK providers are facing in how to combine this service with the traditional investment management services in a holistic, seamless multi-goal advisory service.

Increasing automation. We all nodded in harmony to the observation that there is a drive for increased automation of processes within operations in the immediate future. RPA was cited several times as a technology that can support firms to move away from manual processes, noting that firms need to be careful not to go to the other extreme as human contact could be jeopardised by doing so.

Industrialising the investment approach. Firms are considering a more standardised approach to investments with a core central strategy for the majority of clients. This means that we expect to see the minimum investment threshold for bespoke services to continue increasing way beyond the £1 million mark.

Engaging via Digital. While F2F meetings will stay, many agreed that virtual meetings will become the norm by 2025 as this will save time for FO professionals in terms of travel. However, this is expected to happen gradually as although firms are open to more digital engagement with their clients, there will be reluctance in certain quarters to embrace this technology in the near future. Like with robotics, a balance needs to be found between efficiency and personal touch.

Outsourcing. This topic was practically on everyone’s wish list! Smaller firms will have a first mover advantage as they can make the transition of outsourcing their BO quicker than their bigger competitors. For firms with £5 million AuM and above, this is expected to be a slow and gradual journey due to the transformation challenges associated with replacing large back offices that are already in-house. Experience also shows that desired cost reductions should not be at the expense of flexible customisation to the firm’s needs.

The Cloud. Provided it remains entirely secure and affordable, firms are very open to using the Cloud. Less so for data harvesting and Big Data. Both seen as low on their agenda due to the TCO and payback from investing in such services.

AI. Artificial Intelligence has a place in private wealth management. However, it is seen more as a support function in a firm’s value chain rather than a primary activity to replace humans. One good example we discussed was using machine learning to improve BO processes.

Thank you to all participants for the insightful exchange at this lovely evening in London.