When I started as a research analyst focused on the wealth management sector in 2005, it might be somewhat unfair to say, but my impressions looking back would summarise the sector as stable, traditional, static and, dare I say it, boring.

The client types served, what they were offered, how it was delivered it and who delivered it was all quite well known and saw little change. For the sector, that was a good thing. Then came the Global Financial Crisis, a barrage of regulation, the penetration of technology and digital trends, changing client expectations all around, tougher investment market conditions and the arrival of such new-kids-on-the-block as robo-advice.

All of a sudden (well, over the last decade – but like a bolt of lightning in the stable world of wealth), things are not all as they once were. The effect, when I look at the sector now and consider the future, is that who the clients are, how they are reached and served, what they are offered, how it is delivered and who delivers it are all potentially up for grabs. The stable rulebook of wealth management, that so many have relied upon for so long, is being ripped up and rewritten.

When I look at the marketplace now, yes, a lot of the old stability still exists, and that is quite often a good thing, but there is much needed change taking place which, in my view, can only be a good thing for the wealth management sector to reach its fullest potential. Here are some core areas where we see (or want to see) #wealthischanging:

Wealth levels
The digital wealth trend, using technology to access and deliver wealth management services to more people, can only be a good thing, surely. Why should it be that clients need $100,000, $1 million, $5 million in assets and so on to access 'wealth management'? There can be still be product and service segmentation by wealth (and other factors) but, when considering themes like financial wellbeing, wealth management is moving in the direction of inclusion rather than exclusion. Democratisation if you will.

Fees
Similar to wealth levels, the fee model needs to evolve. The standard percentage of assets under management is outdated and the ongoing lack of transparency (and any justiifcation of it) is just irritating. A client doesn’t pay any more or less for the internet, a car, a house or a new TV just because they are worth a specific sum. And they increasingly want to know what only exactly what they are paying and what for. The industry needs to think hard about its fee model and align it with what clients want on need.

Client wants and needs
Indeed, simply, clients got what they were given based on their wealth levels, mostly. The offering was dictated by what the wealth manager wanted to and was able to offer, not what the client wanted and needed. Largely, 'this is what we do, take it or leave it'. The market is shifting to meet the client in the middle to understand and deliver what it is they need, when they need it, and how they want to access it.

Products and services
This makes me think about a broader question: what is wealth? Is it all about money? To some, perhaps, but to many wealth is about much more. Family, health, education, enjoyment, giving, and so on. For wealth management to retain its relevance and attractiveness, there needs to be a broader and scalable (i.e. not just ad hoc and reactive) thinking around what wealth management is and how to deliver it. A broader ‘wealth’ platform. Again, what does the client want and need, not just what does the wealth manager want to offer.

Delivery
'We meet our clients once a year and send them a paper-based investment report once per quarter’. That is how it used to be. Infrequent, inaccessible and paper-based. Even though it is moving on and we hear much more about when the client wants it, how they want it and where they want it, the market is still a long way off really delivering a client-centric delivery model. After all, some players still think digital means e-banking.

Technology utilisation
It is no silver bullet on its own, but arrival of so much new and improved technology, as well as much more technology that is built specifically for wealth managers, offers a real chance to elevate and improve the wealth management model. Cheaper, more scalable, better connected, personalised, focused and user-friendly, its effective understanding and utilisation offers an opportunity to deliver against all of the issues outlined above.

We believe #wealthischanging, we believe the sector is on a journey and we believe that this journey is worth pursuing. This is not about ripping up everything from the past but evolving with the world we live in to deliver a sector that is able to reach its fullest potential.

#wealthischanging #wealthknowledge #wealthsolutions #wealthmustadapt