Wealth managers have already faced several new challenges and opportunities in 2021. The industry is undergoing historical changes, from increased regulatory burdens stemming from the new administration to understanding a new generation of investors. Here are some disruptive trends that can help asset managers and new firms grow their market share.
Wealth managers that leverage cutting-edge technology and digital tools, like strong selling via social media, robo-advisory, digital onboarding of clients are enjoying exceptional gains. For instance, conventional client onboarding was considered challenging and inefficient before the pandemic. Now, firms can replace introductory in-person meetings and complicated paperwork by investing in automated client onboarding to promote a smoother process.
In addition, a growing number of clients prefer self-service options via mobile devices. They want access to user-friendly dashboards that clearly show their portfolios. Even though robo-advisors are growing in popularity because they provide budget-friendly service, most high-net-worth clients still want human interaction and empathetic advice that only experienced wealth managers can offer. Prospecting through social media platforms is yet another emerging trend in 2021. Building a solid digital presence should be a priority for wealth managers in the future because it enables them to connect with prospective clients and differentiate themselves from larger firms.
Personalization Through Data and Analytics
Wealth managers will have more opportunities to leverage data and analytics to create personalized investment recommendations. Many leading WM firms have already started investing in improving these capabilities because personalized advice is quickly becoming the most valued advisor service. But, those asset managers having the most success are providing clients with hybrid advice, a combination of in-person guidance and digital information, to meet the demand for personalization.
Holistic Wealth Management
Another popular trend that appeared this year is the concept of holistic wealth management. As more clients request holistic advice across all of their assets, firms are meeting this new demand by training managers to go beyond traditional financial planning by considering the critical life events of investors and promoting wellness-led products relevant to eldercare and sustainability. Although only a slight percentage of current advisors are offering holistic wealth planning, those that understand its principles have the opportunity to grow their practice significantly.
Combining digital wealth management and traditional service can help firms reinvent themselves and take their practices to the next level. Wealth managers that leverage digital tools, data, and holistic principles will be in the best position to meet the needs of their clients and compete in 2021 and beyond.