The wealth management evolution has been subtle, but the implications have been substantial for domestic investors.
Traditionally, the focus of wealth management has been to achieve client goals through planning, advisory and continuous relationship maintenance.
Today, changes in technology and client expectations have changed the rules.
On one hand, technological advancements have been improving the way wealth managers assess client suitability and asset allocation. On the other hand, financial literacy has been decaying globally and clients today expect more from their wealth managers.
Wealth managers are no longer expected to be constricted geographically or within a specific range of products. Clients expect wealth managers to look outside of the traditional scope of products and allocate assets in products that have been traditionally viewed as strictly institutional. Clients are now looking for exposure in products such as private equity, hedge funds, REITs, and trade finance.
Additionally, investors are beginning to understand the dangers of concentration risk especially considering current market conditions. Investors are seeking the expertise of wealth managers to help them plan for short term uncertainty as well as long term objectives.
Finally, the traditional view of wealth management being a department within a large financial institution is no longer seen as a positive aspect for clients. This is because wealth managers are expected to offer clients the most suitable products which match the goals and objectives which they have set. When wealth managers offer clients products by prioritising some over others, they prevent clients from accessing the products which are most in line with their objectives.
The impact of technology
For its part, FinTech has been inducing the wealth management evolution. Through the adoption of technologies such as roboadvisory and portfolio management software, wealth managers have more tools and can offer clients an improved and robust service.
For long, wealth managers have been conflicted on whether or not to embrace roboadvisors. However, roboadvisors only assume the advisory role in the wealth manager/client relationship. In fact, as roboadvisors become more and more available, clients will still seek their wealth manager’s advice on which product is more aligned with their goals and objectives. Our view is that anything which adds value to the client must be adopted to ensure that the client is receiving the best possible outcomes.
Elsewhere, portfolio management software has enabled wealth managers to view and continuously assess their client’s portfolio in a dynamic and accurate manner. These technologies have been available for quite some time. Recently however, they have become more available, and more adequately priced to suite boutique asset management and wealth management firms.
How do we navigate these changes?
Our wealth management department is autonomous and not constricted by any specific geography or asset class. We believe that it is paramount to add value to clients through wealth creation, as opposed to simply wealth management. This entails that we partner with reputable financial institutions, including those which have adopted roboadvisory, to provide our clients with an unparalleled service.
We also understand that today’s investor is looking for additional exposure in less traditional products. As a result, we have created tailor made products that can address such needs. Our asset allocation strategies incorporate various asset classes including private equity, trade finance funds and structured products and notes. We also include traditional products such as listed equities and fixed income to create a wholesome strategy for our clients.