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Max Clarke
Former Chief Transformation Officer at Schroders Personal Wealth
The wealth management sector is slowly opening its eyes to the possibilities and opportunities that new technologies and data analytics can bring.
What will be the biggest driver(s) of change in wealth management over the coming years?
The wealth management sector is slowly opening its eyes to the possibilities and opportunities that new technologies and data analytics can bring. Over the coming years there will be a rapid change in how wealth management firms run their business and serve clients. The rise of fintechs has accelerated the need for wealth management firms to improve their digital offerings. Customers have become increasingly used to self-serve digital technologies in their everyday lives, so it’s easy to see why the easily accessible interfaces of fintechs appeal to them. Alongside this, industry regulators are applying pressure on wealth management firms to utilise more of the latest technology as not only does it offer a better experience for customers, but it also creates a higher level of security when handling sensitive data.
What role will wealth advisors play in a digital-first world?
There is a new generation of younger investors starting to come through, many of whom can be considered as digital natives. They engage with digital onboarding processes, digital relationships and self-serve portals on a every-day basis and will expect this experience to be reflected in the way they manage their wealth. But this is not to say that the role of humans within wealth management is under threat, the transition to a new generation will take many years as we see wealth slowly trickle down from the boomer generation. Even when the new generation becomes the ‘norm’, human wealth advisors will still have an important role to play, particularly for any big decisions that need to be made. Whilst digital natives are happy to conduct a lot of research independently, there is still a level of verification and trust needed before committing to a large decision, which can only be built through human conversation. The most successful wealth management firms will be those who offer a hybrid experience, which is mostly digital and gives customers the power to speak with an advisor as required.
Whilst digital natives are happy to conduct a lot of research independently, there is still a level of verification and trust needed before committing to a large decision, which can only be built through human conversation.
To make the most out of the data available to them, wealth management firms need to ensure that all data is secured in a centralised database or CRM that can be accessed across the business.
How important is data analytics to the future success of wealth management?
Data analytics is absolutely crucial to wealth management, but there are not many firms utilising it successfully. Industry regulations require wealth management firms to learn pretty much everything there is to know about their customers - where they come from, their income, what they spend their money on, who their family is, what their longtime goals are and so much more. The result is probably one of the most complete and valuable datasets in the world. But because the data often isn’t stored correctly, it becomes impossible to draw valuable insights from it.
To make the most out of the data available to them, wealth management firms need to ensure that all data is secured in a centralised database or CRM that can be accessed across the business. Having a centralised view of all customer data allows analysts to deliver better customer experience by seeing where the drop-off points are in a customer journey, supporting advisers to predict the most appropriate moments to contact customers with relevant products or services, make smarter sales and marketing decisions, and so much more. Getting to this point may take significant investment, but the results are well worth it.
About Max Clarke
Max Clarke is an experienced leader within financial services and investment banking. His experience across some of the UK’s largest financial institutions gives him a unique and highly valuable perspective on the future of wealth management.
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Assured Thought is a quality assurance and software testing company for financial services firms in the UK, Europe and beyond.
With the right QA testing strategy, access to the right tools and resources, and the support of high performance specialists, you can accelerate the growth of your business and reap the rewards in a complex world.
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