Summary

Investing in technology has leapt to the top of most wealth managers’ agendas. The emergence of robo-advisors has triggered an interest in changing investor demographics and new approaches to client segmentation. On the other hand, shrinking margins and pressure on cost-saving have fueled organizations’ internal needs to seek efficiencies which can be achieved with the help of technology. Although ultimately the human element will remain prominent in the world of financial advice, the industry will continue its technological advancement.

Key findings included in this report -

  • Lower returns increase investors’ price sensitivity, luring them into the arms of low-cost digital providers.
  • Although the average robo-advice client falls into the mass affluent category, HNW investors will also recognize the benefits of digital platforms.
  • With millennials building up their wealth, and intergenerational change on the horizon, financial advisors need to prepare themselves for a new generation of clients, while not abandoning their existing clientele.
  • Combining the best of human and digital will lead to successful hybrid advice model development.
  • Investment in technology is focused on the front-end, the back-office being lower priority.
  • Adoption of technologies such as big data and blockchain remains low in wealth management, and the industry will wait for other branches of financial services to test the waters.
  • Despite some high-profile partnerships between incumbents and fintechs, established IT vendors remain better positioned to work with large wealth management organizations.



Critical success factors discussed in this report -

  • Understand your clients - Clients have been a major driver for investment in technology. However, launching digital platforms is pointless without understanding exactly what clients are looking for, what affects their attitudes, and how is this going to change in the future. Smart client segmentation and leveraging organizations’ strengths, such as human advisors, remains key.
  • Deploy tools to facilitate advisor efficiency - Personnel costs are a significant element in most providers’ income statements. Investing in technology that allows firms to reduce staff numbers will bring long-term cost savings.
  • Use the expertise of IT vendors - As wealth managers have not been leading in innovation, they often lack management that understands technology. Working closely with trusted IT vendors will address this problem.



The report "Technology in Wealth Management: Drivers for Adoption and Future Trends", provides a comprehensive analysis of how technological developments are affecting the wealth management industry, including both traditional providers and new digital entrants to the market. Among others, the report leverages findings from our Global Wealth Managers Survey and Mass Affluent Investor Survey.

Companies mentioned in this report: BNY Mellon, Deutsche Bank, Morgan Stanley, CalPERS, Betterment, Nutmeg, Vanguard, Credit Suisse, J.P. Morgan, UBS, Charles Schwab, CheBanca!, Mediobanca, Scalable Capital, Wealthfront, Moneyfarm, Leodan PrivatBank, PHZ Privat- und Handelsbank, Julius Baer, Moxtra, Citigroup, BlackRock, Waymark Tech, Investec, RBC, SecureKey Technologies, IBM, Australian Securities Exchange, Standard Chartered, Temenos, Avaloq, FutureAdvisor, BNP Paribas, ING, SigFig, Schroders, Gambit, FIS.


Scope

  • Lower returns increase investors’ price sensitivity, luring them into the arms of low-cost digital providers.
  • Although the average robo-advice client falls into the mass affluent category, HNW investors will also recognize the benefits of digital platforms.
  • With millennials building up their wealth, and intergenerational change on the horizon, financial advisors need to prepare themselves for a new generation of clients, while not abandoning their existing clientele.
  • Combining the best of human and digital capabilities will lead to successful hybrid advice model development.
  • Investment in technology is focused on the front-end, the back-office being lower priority.
  • Adoption of technologies such as big data and blockchain remains low in wealth management, and the industry will wait for other branches of financial services to test the waters.
  • Despite some high-profile partnerships between incumbents and fintechs, established IT vendors remain better positioned to work with large wealth management organizations.




Reasons To Buy

  • Understand what has driven change in the wealth management industry’s approach technology.
  • Discover key drivers and barriers for technology adoption in the industry.
  • Learn about how changing client expectations and how you can prepare for the new digitally-savvy generation of HNW individuals.
  • Examine the most successful robo-advice providers and reasons for their popularity.
  • Recognize which key areas of operations within wealth management organizations can most benefit from technology, and how.
  • Find out about the industry’s approach to the most innovative technologies such as artificial intelligence, big data, and blockchain.
  • Identify opportunities for wealth managers to work with established IT vendors, as well as fintech start-ups.