The wealth management industry as we know it today is steadily being reshaped in ways that demand greater efficiency and revised ways of doing usiness.
A new type of client is emerging with robotic and digitalised platforms. Concurrently, the plethora of new regulations posing stricter protocols are moulding and changing the rules of the game.
As the future unfolds and a new breed of client emerges, it is important for wealth managers to stay ahead of the game, remain competitive and invest in a transformation which is built around a technologically-advanced, cutting-edge and refreshed core banking system. All this must be done with the least disruption to the ways with which established clients are accustomed.
People’s schedules have become busier. Wealthy young investors seek more efficient ways of investing their hard-earned or bequeathed wealth. They want to make their own decisions and look for options that allow them to do this both efficiently and effectively. However, they also want to ensure that their decision is the right one, getting a second opinion from the skilled, knowledgeable and experienced wealth manager, who, more often than not, would hold some years of experience and have the backing of a robust research function.
Therefore, although the digital-era is seemingly taking us by storm and changing ways in which clients do business, wealth managers must be aware of the new ways of interaction, but without invalidating their role or function.
Successful service providers are the ones that understand the feelings, approaches and preferences of their clients, and set out to meet them. Yes, digital is set to grow and technology is the way forward for wealth managers in a competitive financial background, but that is not all there is to it. Virtual and digital channels should not be seen as replacing the face-to-face interaction. The two scenarios should be seen as reinforcing one another with face-to-face interaction remaining the bedrock of the wealth management service.
The investment services landscape is being impacted by other trends, namely:
The financial services industry is in constant scrutiny by the relevant authorities, increasing directives around fraud-prevention and anti-money laundering, amongst others. This has certainly increased pressure on financial services providers augmenting the time-consuming process involved when advice is given to the investor. That said, regulations are in place to safe-guard both parties.
In a saturated market, players are looking for new opportunities for growth. Digitalised portfolio management and dedicated platforms are set to gain ground in the future and the future is now.
Digital tools are a factor to be reckoned with. They help drive efficiencies and ease greater investment choices, whilst supporting portfolio construction discipline and improving the client experience. We live in a world where the investors want to engage with investment advice providers on their own terms. Although human advice and intuition are hard to replace, service providers that fail to align with the newest technologies and develop digital advice capabilities will lag behind.
Aldo Scardino is the Executive, responsible for the Wealth Management function at Bank of Valletta p.l.c.