Today’s asset and wealth management market is at the dawn of a new era. Technology, social and economic forces are shaking up the industry in ways that we haven’t seen before. The disruption and challenges being felt across the industry will affect firms of all sizes and across segments. The future of wealth management is in personalized investment solutions utilizing advanced technology and data that is becoming increasingly accessible at every level. Clients will expect more personalized service moving forward. This expectation comes from today’s interaction with Amazon, Google and other major technology players that we interact with every day. Not to mention, the next generation of wealth will be managed by our children, who expect information immediately at their fingertips.
So what are some of the ways firms are handling these disruptors? At SS&C Deliver, our annual client conference, we explored these disruptors throughout the conference. It was evident these disruptors are top-of-mind for our clients, as the session presented by Lee Kowarski, Vice President, Head of Data Science & Distribution Solutions and Nick Wright, CEO, Funds & IT, SS&C Technologies, was standing room only.
During their session, Shaking Up, Shaking Out: Bold Moves that are Transforming Asset & Wealth Management, Lee and Nick discussed that replacing stock portfolio managers with robo-advisors, utilizing zero-fee index funds and integrating digital advice as a standard for customer services are all ways firms today are getting a leg up. Today’s firms have to be receptive and supportive of rapid and nimble changes as technology is updated and new tools come online, and firms must be able to measure what advances will help their bottom line. More has to be done than just relying on increasing AUM to build the profitability of firms.
But what else can be done besides looking at technology? Evaluating operational processes and workflows can help streamline effective communications with clients and enhance stock-picking and finding the right asset allocation.
Financial advisor practices across all wealth management channels and business models need to scale family office-like services to their clients across all wealth spectrums. Scaling such services and developing more personalized portfolios, driven by artificial intelligence (AI), can help make better connections and deeper relationships with clients while aligning with more holistic advice and goals-based wealth. And, the focus of today’s data sets can help firms determine the lifetime value of a client, helping to predict the total profit a customer will generate over the course of the relationship, an important shift from short-term sales to looking at long-term revenue. This information can also provide insight into the right client mix. What if your mid-sized clients actually made you more money over the life of the relationship than your largest clients? Maybe this would change your focus on new business and look at lower hanging fruit to bring in additional revenue to your firm.
Firms utilizing these new-era tools can help prioritize high-growth opportunities for their clients and build the relationships that will make everyone successful. These relationships will rely more on transparency to build trust and continue long-term commitments as clients require more sophisticated and real-time access to their information. Clearly understanding these needs will help build clearer paths to sales and future growth opportunities. If you want to explore this topic further, we invite you to read our whitepaper and listen to our webinar.