Re-Thinking Automation in the New Era of Wealth Management

In recent years, wealth management firms have had to come to terms with three unquestionable truths: regulators are demanding more, profits are harder to find and technology is transforming how end-clients engage with providers.

Firms are finding themselves caught in a vicious circle where they are expected to do more to meet both legislative and client demands, while having less operating capital with which to invest in and achieve compliance. As a result, they are increasingly turning to next generation automation to tackle this ever-converging set of complex challenges.

Next-generation automation

For most firms, automation is not new and is already allowing them to refocus resources on the high-touch aspects of their businesses. But this is only the start. By automating areas not previously considered appropriate, they can make a significant and positive impact on both client service and operational efficiencies.

The stumbling block for some firms though is that traditional business models place great premiums on personal relationships, bespoke advice and customer service – and some might see this as fundamentally contradictory to a more automated delivery mechanism. The reality, however, is that automation can actually support and enhance this more tailored approach.

Another barrier is that many systems designed for mainstream brokerages or asset managers are not appropriate for the more specialised wealth management space. That’s why firms are now embracing a new wave of technology, which is giving them the opportunity to re-evaluate not only the service they offer but also how they offer it.

Technology in practice

Steve Martin

For wealth managers yet to take the plunge there are significant gains to be made. These include improved and more frequent access to portfolio data and real-time access to performance and risk reports, with accurate input from a variety of sources presented as a coherent whole. This is particularly relevant for the front office, where portfolio managers, client relationship officers and investment managers depend on access to granular information to make informed and often quick decisions.

Another benefit is the extent to which information can be shared across a firm. Gone are the days of individual portfolio managers working in silos, making isolated decisions around a particular investment based on disparate data. With a consolidated and consistent view of information, extended to multiple managers, wealth management firms can make more informed decisions across a client’s entire portfolio.

One emerging area that holds enormous potential is the mobile channel. For managers, automation can deliver mobile access to portfolio information, enabling them to make decisions on the move – leading to more flexible and responsive client management.

When it comes to investors, firms can also harness the ‘always-on’ capabilities of consumer technology to deliver similar levels of availability. Smart phone apps can provide investors with a real-time, any-time summary of their investments in a variety of accessible formats, as well as more granular detail about individual funds or stocks.

In this complex landscape, it is not simply a case of finding cheaper ways to service clients – it is about adopting entirely new approaches. As such, next generation automation has emerged as the essential next step, enabling firms to transform how they interact with clients. The end result is efficient and effective business models that deliver bespoke services, compliance and, ultimately, greater profits.

Getting there doesn’t need to involve a complete overhaul of technology. With the right portfolio management solutions, firms will be well-equipped to tackle an increasingly challenging market while continuing to innovate and remain competitive. Many are already finding that iterative approaches, which gradually introduce automation to individual parts of their operations, can deliver incremental yet significant returns.