Objectway examines scaleable options for wealth managers
Software and services provider Objectway has published a report entitled the The Wealth Management Firm of 2025, a research paper conducted with Compeer UK, providers of benchmarking information and services to the wealth industry.
The report was compiled through a series of workshops with over 20 senior executives from UK wealth and investment managers, with the objective of trying to understand the key issues firms are currently facing, the improvements required to make them more scalable and how they see the industry evolving over the next five years.
For wealth management firms, the cost of front office professionals is by far the greatest expense, and has been steadily rising by 5 per cent per year on average. By 2025, there will be a significant change in the typical day of a front office professional, the report says, finding that they will spend more time building relationships, with a greater use of a portable device to improve their efficiency when client onboarding or sharing information any time, anywhere.
Client engagement will largely be driven by the investor, exploiting technology to reduce costs, while preserving the possibility to interact – compliantly.
The CRM that firms use could be much more than a database of client information, the report finds. If fully integrated with front-end tools and back-offices systems, it can evolve into a true client management system covering on-boarding, re-boarding, client reviews.
Back Office costs have increased by more than 17 per cent between 2013 and 2018. There is an overwhelming demand for incremented automation, which will not only have cost reduction benefits, but will also encourage clients to invest with the firm, the report says.
Finally, there will be more attention to the cloud, outsourcing and artificial intelligence in the near future, according to Objectway.
“Provided it remains inexpensive and is entirely secure, firms are very open to using the cloud. Artificial Intelligence will be used as a support function, possibly through using machine learning to improve back office processes or by assisting the front office with investment selection, and should not be thought of as a replacement for humans within the business,” the report says.