Three Trends That Are Affecting The Wealth Management

Written by: Lauren Topper

Wealth management has always been an area that’s relatively complex and requires a significant amount of expertise. This has primarily been because of the extensive knowledge that’s required when it comes to stocks and other areas. However, these tried-and-true areas are becoming less successful as of late as there have been a considerable number of factors that affect the niche. This has meant that wealth management firms have needed to begin adapting much more than they needed to in the past, and at a much faster pace.

While where to invest and how to approach investing has needed to change drastically over the past few years, what many may not have realized is that how wealth and asset management firms have also needed to change how they operate. Much of this has been driven by technology, which has affected almost every company and industry, regardless of size. However, there have been quite a few other notable trends that have forced many firms to begin changing how they approach wealth management.

Much of this has been focused on changing customer demands, which has resulted in what kind of services that a firm should offer to remain successful. This has meant that they’ve needed to become much more flexible in their approach while keeping abreast of a few emerging markets. That being said, there are a few different trends that have been making an impact across the financial industry, with some being focused chiefly on the wealth management niche.

Agile Distribution Models

Customer preferences have always been something that has changed over a relatively short space of time. In recent years, this has focused on more of a product-oriented mindset, which can have drastic implications for the FinTech world. While there are still a significant proportion of potential clients that prefer the more traditional approach, there’s been an emerging market that has demanded a more agile distribution model.

While this has been true across every industry, it’s become especially pronounced in the wealth management industry. Much of this has been driven by how fast customer requirements and preferences can change. As such, flexibility and an agile business model have become increasingly more vital for every business. However, this doesn’t mean that the FinTech world hasn’t already been adapting to these demands.

On the contrary, there have been a variety of different tools released that has allowed firms to become much more adaptable while minimizing the time and resources that this takes. Many of these tools have focused on enhancing the customer experience, although there has been a significant amount of them that have improved the services that firms can offer, as well as how they offer them.

Technological Investments

Technology has been advancing at an increasingly rapid pace over the past few years, with many companies who specialize in the niche reaping a significant amount of dividends. Many consumers have noticed this and begun thinking about investing in the niche, although they may not know much about the industry as a whole.

This has meant that wealth management firms have needed to become increasingly knowledgeable in the niche so that they can inform their clients about how they should invest in it.

This doesn’t mean that all potential customers are looking towards automation or Artificial Intelligence. Instead, many are looking for areas that include a blend of both alongside human interaction, which is an area that many firms should look to explore in the coming months. Because of the speed at which technology is advancing, however, this may need dedicated professionals to analyze and strategize over.

These changes don’t just affect other industries, however. Instead, there have been a variety of technological innovations in the financial planning world that many firms will be able to take advantage of. This has primarily been seen when it comes to analyzing big data, as well as making more accurate financial predictions. Because of the importance of both of these areas, among others, it’s become crucial for many wealth management firms to implement these technologies into their practice. This can be beneficial for both a firm and their clients, in both the short and long terms.

Streamlining Onboarding

The customer experience is something that’s become increasingly important for every company, and wealth management firms are no exception. This is especially true when it comes to the process of onboarding, which has historically been relatively slow, which may have been because of a variety of reasons. However, customers may no longer stick with firms that have a slow overall process, and will instead look for speed as much as they do accuracy and reliability.

This means that the onboarding process needs to be better streamlined while still achieving the needs of both a business and its clients. With the recent advancements in technology, this can be relatively easy to implement, although it’s something that the majority of firms will need to spend some time at to ensure that they receive the benefits that they’re looking for.

Focus On Retirement Plans

The overall population is beginning to lean somewhat toward the retirement years. This is primarily due to more and more people having children at a later stage in life, if at all, which means that retirement plans will start becoming increasingly more popular among financial services. This is something that many potential clients are becoming more aware of, with some studies suggesting that the majority of Americans are worried about not having enough money set aside for their retirement years.

Because of this, retirement plans are one of the primary services that consumers are looking for when they approach a wealth management firm. While there can be a variety of aspects to these strategies, it can be vital for firms to begin specializing in the niche, or risk losing out on a considerable amount of business. This is especially true when it comes to the likes of decumulation and other areas.

Each of the above trends look set to continue in 2019, and possibly for years beyond. This means that wealth management firms will need to begin adapting quickly or risk losing out on a significant client base. This is chiefly because many of the trends that are affecting the industry focus on what firms can offer their clients, as well as the overall customer experience. With the changes in customer preferences have come new tools and tricks that allow companies to keep up with these changes.

However, keeping up with market demands may often not be enough to keep clients coming through the door. Because of that, it can be crucial to keep abreast of the possible factors that may affect consumer preferences. This is something that the majority of wealth management firms should be quite adept at, as it’s what they do with other industries. While some larger businesses have been able to do so, many smaller ones have often overlooked them.

This shouldn’t be the case, largely because of how much of an impact the trends can have. Sometimes, it may seem as though it’s other industries that are the ones that are changing, which can often keep the majority of financial management firms occupied. However, the majority of trends that affect these areas eventually end up affecting wealth and asset management, though how they do so may differ.

If there’s one key takeaway from each of the trends above, it’s staying flexible with your approach and business plan. By staying lean in how they do business, any firm will be able to better capitalize on emerging markets and changing customer preferences.


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