Five trends that will impact the wealth management industry

While the pandemic focuses minds on client protection, a quiet reshaping of the industry is taking place

Five trends that will impact the wealth management industry
Grant White

While most businesses are focusing on how to protect their clients from the various market risks that have been experienced in 2020 - primarily due to the pandemic - there is a re-shaping of the industry going on quietly in the background.

Some of these trends had already existed as a natural evolution but the changes that have been forced on people while working from home and social distancing have also accelerated things.

The common denominator behind each of these trends is technology; the financial services industry has typically lagged behind other industries in terms of technology utilization. Most advisors will say they want to improve their adoption of technology.

According to Investopedia, 40% of the financial institutions are looking to improve their tech in the coming years but I would argue that this number is probably higher, or should be higher.

 The five key trends I see shaping the future of our business are as follows:

  1. More personalized client experiences
  2. Analytics and big data solutions anticipating needs
  3. More efficient back office operations
  4. Better digital experience for clients
  5. Value in broad advice

More personalized experience
Whether people will admit it or not, investors want to know that their plan is working for them. Their family is different, their businesses are different and their goals are different. Simple retirement projections can be effective but many are missing the mark and are not connecting. This is possibly because more and more people are not considering retirement as their primary goal. Along with planning, people are also more concerned with knowing what they invest in or at least knowing what they don’t want to invest in. The days of cookie-cutter solutions are fading.

Analytics and big data solutions anticipating needs
Historically, the best customer service meant that you reacted when the need arose either from an email or a phone call from a client. Going forward, you will be expected to anticipate this need and respond to it before the client knew it existed. Big data and analytics has become a monster business that multi-billion dollar social media platforms are masters at. Sophisticated CRM systems will be required to utilize collected data, mine it for upcoming opportunities and prompt action, whether that be automated or human. Two key components of this trend include proper data collection and sophisticated curating of this data.

More efficient back-office operations
Highest on the list of areas likely impacted during the pandemic is operations, as we all experienced some form of social-distancing initiatives. How important have digital signature solutions become in the past few months? If your firm doesn’t have them, how aware are you of that fact now? Operations teams have been pressed more than any other division in this industry as they accelerated plans for a more digital world. This trend will continue as distance from advisor to client becomes even less of an impediment, along with the need for as many face-to-face meetings.

Better digital experience for clients
I’ve heard this trend described as the “single-pane-of-glass” experience. Whether we are ready for it or not, our industry is facing competition from the likes of Apple and Amazon. Perhaps not directly just yet (although I think these days are coming) but certainly as it relates to expectations on experience. Clients are demanding a more seamless experience across multiple platforms that can be accessed wherever they are. This goes beyond just account balance reporting and traditional online access. It includes providing an interactive experience that matches their assets directly to their goals, connecting the means to what and who they are passionate about.

Broad based advice
The role of an advisor has been changing over the past decade or two, although greater acceptance of this trend will be required. The definition of financial advice has always gone far beyond just investments but yet that remains the primary focus of most advisors. Clients want more broad-based solutions that cohesively work together. Advisors must adapt to be the glue that connects these different components together and bring in specialists when the client situation requires it. Your role in developing good relationships will outweigh your ability to read research reports.

Adapt or die is a common mantra we hear in the tech community here in Winnipeg, but it really applies to all industry. Financial services have lagged in many areas but consumer expectations are going to demand more from our professionals. A silver lining in this pandemic is that it is forcing us to be better and, frankly, our clients will demand better going forward.

Grant White is a Portfolio Manager/Investment Advisor at Endeavour Wealth Management with Industrial Alliance Securities Inc, an award-winning office as recognized by the Carson Group. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families.

This information has been prepared by Grant White who is a Portfolio Manager/Investment Advisor for Industrial Alliance Securities Inc. Opinions expressed in this article are those of the Portfolio Manager/Investment Advisor only and do not necessarily reflect those of Industrial Alliance Securities Inc. Industrial Alliance Securities Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.