Unlocking the Door to Tomorrow's Growth: The Future of Investment and Wealth Management

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By Ryan George, Chief Marketing Officer at Docupace

As the Canadian science fiction writer William Gibson wrote many years ago, “the future is already here—it’s just not very evenly distributed.” If you’re looking for an example of the idea that transformational change disproportionately impacts different groups and communities – look no further than the investment and financial advisory business.

Digitization and new client expectations in wealth management are already here. Firms that are unable or unwilling to embrace and integrate technology into their core processes and see it as a fundamental part of their value proposition and client experience will be left behind.

To survive and differentiate themselves from the competition, advisory firms need to understand a changing client base, embrace emerging assets (like cryptocurrency) and build integrated systems that empower advisors to deliver a personable, relevant and empathic client experience.

Changing Dynamics, Demographics, and the Rise of the Self-Service Investor

In the next 10-30 years, trillions of dollars will be transferred from the Baby Boomers to their Gen-X, Millennial, and Gen-Z children. All generations have had their ups and downs, but Millennials — particularly those born before 1990 — had a particularly rough start out of college. Large student debt bills were compounded by one of the worst job markets in decades due to the Great Recession. This lackluster start has left Millennials behind in amassing wealth, buying homes, and making other advances afforded to the generations before them.

Despite making up most of the workforce, Millennials only hold 4.6% of US wealth. Data indicates that Millennials earn 20% less than Baby Boomers did at the same age. However, there are indications that Millennials are gaining ground. Since 2016, Millennials have grown their wealth by over 80% thanks to more interest in investments and healthy stock market gains.

Delivering Digital Experiences with a Human Touch

As younger, digitally native investors begin to inherit, earn, and grow wealth, they’re looking for solutions and advisors that can match their expectations of transparency, speed, and personalization. They’re seeking solutions that allow them digital simplicity, transparency, security, and human interaction to help guide them into understanding their goals and desired outcomes.

These clients want to access their information on their own time and at their own pace. A customer may not need to walk into a branch, but they want the option to reach out to a human when they need assistance or advice.

To enable advisors to do what they do best and maximize their expertise, firms should invest in platforms and tools that manage day-to-day operations and streamline key processes. Automation can assist advisors in a few key areas that will allow firms to scale, stay lean, and be flexible. It also eliminates some of the tedious work that gets in the way of more strategic initiatives. Some of these capabilities include:

  • Simpler, intuitive client onboarding programs
  • Portfolio management
  • Account aggregation
  • Reporting
  • Assistance with research and investment ideas
  • Rebalancing
  • Transaction capabilities
  • Trading

It’s important to point out that the in-person experience wealth management firms deliver to clients will never completely go away. Digital tools supplement and enhance the advisor experience; they do not supplant it. Investors, especially during times of uncertainty, look for individuals they can trust for advice and guidance that simply isn’t available through digital-only experiences.

Embrace Crypto and Other Emerging Areas

Regardless of your personal feelings toward crypto, top-performing firms are laser-focused on the client experience and streamlining processes. They devote their technology resources toward tools and processes that integrate with their existing systems and build on a strong foundation that will be scalable and flexible far into the future.

How to Best Adapt

This CEO Agenda below centers around three main focus areas: Protect the Bottom Line, Win the Future and Build Capabilities.

Protect the Bottom Line

Firms must optimize end-to-end processes, streamline management and matrix structures, and embed agile working processes beyond IT teams to improve structural efficiency.

Win the Future

Given the rapid change seen in the last 20 years, leaders must prepare for additional disruptive industry changes. BCG recommends firms focus on the following areas to remain surefooted in an increasingly crowded and competitive market while delivering exceptional client value:

  • Personalized value propositions
  • ESG and impact investing
  • Challenger plays
  • Ecosystems and M&A

Build Capabilities

To execute the above agenda, firms must refocus efforts on strengthening foundational capabilities. The following are those BCG deems most important for long-term success:

  • Client Understanding: Wealth management providers must implement a direct, systematic approach to gather and analyze client feedback. This information should be presented in an easily digestible way for stronger decision support.
  • Talent and Culture: To succeed in an increasingly digital, client-focused world, firms must attract a broader range of talent, starting immediately. Business leaders and hiring managers must carefully examine talent pools for individuals who will further business growth and whose values align with business culture and practices.
  • Digitization and Data: To maintain a competitive advantage in the future, firms must fully integrate the latest tools and technologies into business and operating models. A clear, consistent focus on implementation efforts and support from senior leadership ensures these efforts are successful.
  • Technology Platform: Client needs, operating models, and business processes will look vastly different in upcoming years. Wealth management providers must assess those future needs and select the appropriate key technology tools and platforms needed to meet them.

Here’s how to choose the right technology and deliver the best experience for potential clients: Automation, Integration and Collaboration.

Digital Table Stakes

Digitization enhances the client and advisor relationship and experience. It allows wealth advisors to be more efficient, understand their customers better, and provide a level of customization and insight that previously was not available. It also enables this experience at a scale that wasn’t achievable. What was previously only accessible to high net worth clients is now possible for all investors. This democratization will only grow as more firms come online with their digitization efforts.

The need for sound financial advice has never been greater.

Leaders and executives must position themselves and their firms for future success by refocusing and reinventing business and client processes, investing in smarter digital tools, and strengthening foundational capabilities. With this focus, their wealth management firms will be fully prepared to face the future’s unknowns.

Ryan George is the Chief Marketing Officer at Docupace. Docupace focuses on digitizing and automating operations in the financial advice industry, reducing back-office expenses, and improving efficiency. Ryan is responsible for the company’s brand awareness, early-stage sales pipeline, content strategies, customer and industry insights, internal and external communications, design, and events. George actively engages in leadership roles in both the financial services and marketing communications communities. He a member of the Forbes Communications Council, an invitation-only, fee-based organization of senior-level communications and public relations executives, the CMO Council and the CMO Club.

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