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Those in charge of wealth management can prepare themselves for digital disruptions if they understand the main changes that are going on in the industry. This means that they have to focus on the important trends of a digital transformation. The financial services sector, together with the wealth managers has been broadly considered to be on the edge of digital disruption.

Certainly, in the digital age, there is the likelihood to create substantial cost cutbacks via robotics and automation. Business models can be changed making use of advice with a digital assist and push uneven gains in the market-share by digital procurements and clients servicing. When it comes to wealth management in the US from the perspective of revenue and asset generation not much has changed.

For example, in wealth management, if there are waves of digital attackers storming the gates, they would only have made a representation of less than a percent of the world market. As at 2015, the $35 trillion industry didn't even have up to $50 billion assets under management. 2020 projections for aggressive attackers will be at 5% of industry assets. So wealth managers are faced with the choice of maintaining their present course and holding their competitive stance or to attack the attackers.

Although these disruptions will not cause an overnight change in landscape, it is still a fundamental change. This is especially as some present wealth managers are playing strong digitally. Thus, wealth managers have to make their move when that change happens. To figure out how this change is going to be and make projections, research was conducted on present players, wealthy consumers, and the retail banking industry.


Fundamental Wealth-Management Trends Pushing For Change

The online journey:

Just like in several other sectors investment journeys are increasingly started online by wealth management clients. They begin to search for financial companies and comparing their services and reading reviews on social media. With digital solicitation and outreach, clients can be moved to take action. About 50 percent of most clients direct themselves with the other 50 percent seeking the help of advisors. Of those that seek the help of advisors, it is just about 15 percent of them that are ok with a wholly digital communication model. Wealthy clients and old-fashioned consumers usually prefer to directly deal with someone.

Mobile platform:

Mobile interaction is also growing fast as it now accounts for 35% of the interaction share. Firms like AFH Wealth Management now make use of the mobile channel to differentiate themselves as it is the fastest growing channel across financial services.

Remote engagement:

Millennials are now ok with remote engagement. There is still the other broader part of them that have their comprehension of engagement changed from wholly digital to the inclusion of remote interactions. About 30% of clients in different age groups embrace remote engagement with an advisor that lives far from them.

Increased expectations of other sectors:

A lot is expected from financial services companies especially when it comes to a digital channel. However, this rule can raise legal and compliance fee and exert pressure on price value and third-party income streams for those involved. There are important processes that have to do with servicing of accounts, transfer of funds, opening a new account and transferring accounts. These processes can be burdensome when it is compared with how it is in another category like ride sharing, streaming content and retail.

The rise of vital experience fields:

Great design has become what differentiates competitors and managers are figuring out how to implant their companies in a client's system of services and solutions. They recognize that business, funding, overheads, and other dealings are integrating fast. Another field that is emergent is personalization in which companies that begin to collect and act on perceptions of client needs and attitudes will gain the advantage. Easiness is yet another area that is prevalent with clients and where companies can differentiate what they offer.


Certain regulations like the DOL (Department of Labor) fiduciary rule can change how these firms operate. This fiduciary rule can fix sizeable sums of money as well as advisors on the move, generating opportunities for wealth managers that are properly positioned.

Digital Transformation

Digital and technology are often confused. Digital transformation however firstly means a change of culture. It about knowing what is at stake and how with digital you can reach there. This means getting familiar with advanced analytics, digital servicing and marketing. The focus should be not only on the customer but also on the journey. Build an opinion on the journey of your main customer making use of a laborious journey analytics and how the journeys are like in a digital world. When it comes to transforming the business there are numerous ways.

Numerous models exist like a factory for digital centre of excellence or business transformation for business rewire, outpost and sidecar for new business and adjacent business. Shape for numerous speeds and make a swift digital engine to go past the traditional, deeply sequenced 'waterfall' method. Advanced analytics should be prioritized to hasten new competencies that measure your competitive lead. For example, by seeing clients' complete economics, journeys and sections.

There should be a model of governance that would enable the necessary decision to digitize traditional business structures. A double speed IT should be used to separate record systems from engagement systems to increase the pace of services, products and innovations that enter the market. Recognize the digital talent and competencies that will generate new value by making a gap analysis. Build one set of digital metrics to gauge progress through the firm.

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