Like many industries, the wealth management industry is about to experience inevitable changes. With this, wealth management firms must be aware to catch up and do the necessary. In separate papers released by Capgemini and BCG, it noted that wealth managers must be able to fully reinvent and equip themselves with the latest in technology to provide improved customer experience with deeper personalisation.
In detail, here are the top wealth trends from Capgemini’s World Wealth Report (WWP) 2019 and the BCG’s Global Wealth 2019: Reigniting Radical Growth.
Top Wealth Trends Today
Digital Offerings are Not Enough To Satisfy Wealth Clients
Overall, the satisfaction in wealth management firms is still high. However, clients expect them to provide more than just the usual digital offerings. They are looking at a more personalised, seamless, and deeper digital experience.
In the WWR 2019 Global High Net Worth (HNW) Insights Survey, less than 50% are satisfied with the available online and mobile platforms. They are challenging management firms for more digital interaction with accessing portfolio information (almost 88%), executing transactions (87%), and getting advice/service from wealth managers (84%).
The reports also pointed out that a good number of wealth management firms are still way behind in using digital tools and capabilities. In addition, acquisition of speed, agility, and mindset to make it happen is also lacking. This then negatively impacts a client’s experience, causing firms to miss out on value and shoulder increasing cost to serve the clients.
The Necessity to Increase Investment into Product Innovation
Wealth management firms who want to improve client relationships, extend their reach and differentiate its offerings. They must divert their resources into advanced analytics, product innovation, and strong sets of digital tools and platforms. BCG’s report highlighted that once front office transformation is carried out, it can increase wealth managers’ top performance by 8% to 15%.
As for the WWR 2019 Global HNW Insights Survey, wealth managers noted significant differences in their expectations and actual firm delivery. Particularly with regard to their capabilities and identified levers. Most wealth managers feel pressured to work using isolated legacy systems that prevent them from giving clients a seamless and simple process experience. This significant gap may even be exacerbated with the lack of an integrated firmwide solution or portal.
Bigtechs Threaten the Industry
Due to their immense digital capabilities, bigtechs like Alibaba, Amazon, Apple, Facebook, and Google threatens the industry. One of the top wealth trends now is bigtechs joining the scene. They are now offering wider financial services starting with payment schemes then moving forward with loans and insurances.
Apple, in 2005, founded Braebum Capital, the company’s own asset management company. Whilst this solely caters to managing Apple’s cash reserves, it is a significant first step in showcasing its asset management capabilities.
Similarly, Tencent invested $360 million into one of China’s leading banking firms, China International Capital Corporation in 2017. Just last year, the tech giant received licence to sell mutual funds to WeChat users.
In 2018, Ant Financial’s wealth management arm stated that its user base skyrocketed to 622 million users. The total assets managed had a value of $345 billion.
Personalisation is the Key Differentiator
As wealth management methods continue to evolve, one of the main factors that will remain and one that will have a big impact would be personalisation. Looking at the industry today, it is apparent that almost all clients want to receive personalised experiences. Sadly, only about 40% of HNWIs surveyed reported satisfaction with tailor-made offerings from their wealth management firms. For under-40 HNWIs, only 33% claimed satisfaction.
Respondents also shared that firms who do not improve may lose their clients. With this, BCG encourages firms to invest in personalisation, analytics, data harmonisation, management, and storage. This is to allow wealth advisors to deliver a more tailored service to their clients.
AI Changing the Landscape
Firms must be open to emerging technological advancements such as AI, automation, and digital analytics. Since these advancements will spell a big difference, particularly in improving manager efficiency and client satisfaction.