Year in review

What would you highlight as the main technology themes for the wealth management sector in 2021?
The major technology themes in 2021 were driven by the huge amount of M&A activity that took place during 2020 and then into 2021 itself. M&A activity was either a wealth manager scale-based play or a capability play as incumbents acquired wealth tech firms looking for enhanced platforms and teams. Private equity funded many of these transactions, focusing on cost, simplification, rationalization, and eliminating multiple overlapping platforms and operational teams supporting them. We expect this trend to continue in 2022.

Why were those themes relevant in 2021 and what progress did wealth managers make in response?
Frankly, the private equity-led deals meant technology change happened more quickly than in the past because of the deal led imperative for action. Wealth managers also continued with the increased level of change they adopted through necessity from 2020.

Year in view

What would you highlight as the main technology themes for the wealth management sector in 2022?
M&A and private equity-led investment in wealth management and wealth tech companies will continue through 2022. Already, at the start of 2022, we have seen two large wealth managers purchase and invest into two WealthTech firms, both for hybrid advice capabilities. This activity leads to a focus on integrations and/or simplification, rationalization, and elimination of superfluous legacy technologies.

The lines between self-directed, hybrid, and traditional advice services will continue to blur, leading to a requirement for more joined-up technology overlays to manage clients across all offerings. The provision of costeffective advice, especially when staff costs are rising so quickly, becomes a technology issue to resolve.

Another thing we are also being asked more about is how to integrate a client’s ‘off-platform’ assets into a firm’s view of the client’s whole wealth, be it self-directed investments or digital currency holdings with the newer custodians.

Why have you highlighted those themes and what do they mean for the wealth management sector?
Those are the themes clients ask us to help them solve; technology simplification, cost-effective advice provision, and the single view of different products and services across an organization. All of these are positives for the end client – total wealth management in a costeffective way.

How should a wealth management firm tackle these themes and what targets should they set?
There is no single answer as each wealth manager, private bank, and brokerage has its own unique offering, target client type, and way of doing business. We believe giving each firm access to the full ecosystem of applications allows them to meet their targets in their own way.

Market status

Where is the wealth management market in its technology journey and what are the industry’s strengths and weaknesses in its use of technology?
The past two years have profoundly accelerated the wealth technology journey; things that have been spoken about for the past decade have now been implemented off the back of the remote working imperative.

We are also seeing a more global outlook for wealth technology – the best global solutions are now available in most geographies. Solutions that were previously only available to the largest firms, with the deepest pockets and large technology teams or consultants, are now available to the majority, even the individual independent financial advisor.

It is in general a positive story; however, the primary weakness remains the industry’s reliance on a lot of legacy back-office technology at the end of their useful lifecycle. Migrating away from these systems remains the most difficult technology undertaking a wealth manager can embark upon.

In terms of adopting and making the most of the technologies available, what are the main challenges wealth managers face and how can they overcome those?
We often hear that technology has not been adopted in the front office due to ‘people not wanting to use it’ or ‘people not wanting to change the way they do things’. This is not a people issue, it’s a poor technology issue! If the technology is simple to use, beautiful, and works, people use it. We work on the principle of ‘addiction not adoption’ – if your job becomes easier, faster, and more profitable with a new platform – you and your team will use it.

What are the main building blocks for any wealth management firm in making the most of the technologies available to them?
Quality people and their attitude are the most important consideration for any use of technology. Decision-makers and leaders at wealth managers with a culture of open-mindedness, immersed in the possibilities of what technology can achieve, but with a pragmatism around getting the job done make the biggest difference.

Technology-wise, it is a list of cliches, but they are cliches for a reason – they are now must-haves. Cloud, SaaS, open architecture, use of third-parties via ecosystem, API-enabled, modular, and componentized architecture.

Focus & solutions

Considering the themes identified, what is your role and what does your business offer to support wealth management firms?
We believe in making financial advice available to all. We think that the efficient use of technology can help achieve that.

We want to enable our clients to provide financial advice, providing them with the tools for their advisers and client to communicate. Our technology allows all the component parts of the client lifecycle; marketing, prospecting, onboarding, assessment, financial advice, management and ongoing service. Our solutions are built on the Salesforce platform and its annual investment in the technology of circa US$3.5 billion a year. Wealth managers can access all that comes with it, but with specific solutions and integrations relevant to our unique industry.

How will your firm further develop its offering to support the evolving needs of the wealth management sector?
Building on the success of our company in the United States and Australia, we are now well into our UK launch. We have been working with clients to refine the product to the specific needs of the UK market. We are now looking to connect with the market and develop meaningful partnerships with wealth managers, private banks, and brokers.

This article is from The Wealth Mosaic's WealthTech 2022 Report. Access the full report here.