For this piece, we talk to Christian Jedlicka, Chief Strategy Officer, at Etops. He says that smaller wealth managers, EAMs and family offices need help to digitise themselves.

Please introduce yourself
I am Christian Jedlicka, CPO at ETOPS. I am responsible for all our product offerings and development. I am actually from a non-tech background and started out in business administration before moving into the software industry some 20 years ago. 

What are the major issues facing the wealth management industry, and how can technology help?
Here in Switzerland, Fidleg legislation and its impact on the External Asset Manager (EAM) community is at the forefront of our minds. They are usually small, tight-knit organisations that work by being hyper-agile and flexible – able to propose the best-of-breed solutions for clients and offer a more strategic, independent viewpoint, leveraging the offerings of various partners and banks. Fidleg increases investor protection by bringing Switzerland’s regulatory regime into line with the EU’s MIFID/MIFID II directive. It will mean that EAMs must comply with new requirements, including information duties, client classification, checks on the suitability and appropriateness of investments, and responsibilities concerning conflicts of interest.

Another issue that wealth managers in all geographies face is how to respond to the different expectations of younger, digital native investors and how to bring about a fully digital service that meets to needs and expectations of this cohort. The best way of doing this is in a hybrid model where digital tools are well supported by the human touch. The digital tools essentially fuel the adviser with insight and free them from admin tasks – thus giving them more time to provide useful insight to their clients and thus enhance the client experience. This is a rapidly evolving area, not a static one, and so we expect that tech will need to evolve to keep up too. 

How does Etops fit into the wealth management value chain?
Etops covers the whole value chain and offers a full platform that includes the back and middle office. The idea is to support a firm’s digitisation process.

In particular, we think that the quality of the data is intrinsic to success and that many, if not most, need help with data collection, refinement, aggregation, and enrichment. We also take care of data integration and reporting functionalities.

Our whole offering is based on having experienced and knowledgeable people within the business. We can offer a white-labelled solution that fits into the EAM or bank’s own infrastructure. We have recently been looking to extend our capabilities, and it was with family offices perhaps in mind that we acquired evolute in 2020. This step added its interface, which collects, normalises, and readies data from custodian banks. After that, we bought Infinys, to transform ‘data to business’ for our customers. We also recently acquired German software provider Coryx. It offers digital solutions and automated processing of large amounts of data from different custodian banks for managing portfolios.

Are wealth managers ready and able to digitise their businesses? What are the barriers, and what are the drivers?
The challenge for smaller players is that they do not have the resource to start building or implementing massive technological change. Yet they need to do so if they are to provide the service that clients now expect as standard. They must choose between merging into a bigger entity or, alternatively, taking on a platform solution that will slot into the existing infrastructure. EAMs are a particular group in need of such a proposition, and family offices are a growing sector that has a real need for help.

Do you think vendors are visible enough? Can wealth managers see what is available and pick vendors to work with, or is this hard? If so, why?
The lack of visibility between wealth managers and vendors is a huge problem within the industry generally. In Switzerland, a consultancy business to match up vendors with wealth managers has sprung up to solve this issue. They give active advice to wealth managers when selecting a shortlist of vendors and deciding what attributes to look for. One problem that the broader industry has is that wealth managers tend to look solely within their geography. Still, technology vendors can easily cover more than one geography and tailor their offering accordingly.

What should a good vendor do beyond providing the technology? What makes a good collaboration partner?
A good vendor will be able to provide a robust offering, obviously, but also will take care of the ancillary services to bring about a whole package that involves both the product itself and the service around that. Vendors should be able to effectively manage deadlines and expectations alike and go about their business in an efficient and ‘no fuss’ way to make sure that implementation is smooth. Communication and listening to what the client wants to get a deep insight into them, and their needs is also important. 

What will we see over the next year or so in terms of technology adoption and new trends for the wealth management industry?
We think the next year will see lots of focus on bringing together existing technologies and solutions to provide a single effective ecosystem for a firm that functions well. Tech is a key supporter of a hybrid offering and critical in providing a true omni-opti channel offering, with a supercharged adviser sitting behind that to provide the much-valued human element to the client. Crucial to developing this further will be the ability to leverage data, and we think there is so much scope for wealth managers to make better use of their data and, in doing so, improve their servicing proposition and better support the adviser.

If you would like to take part in our ‘TWM talks to…’ series, please get in touch with us at office@thewealthmosaic.com