The future of wealth management operations

Wealth management has stuck to a fairly traditional operational strategy since its genesis—emphasizing high-touch relationships, trust, and superlative service.

But technological and geopolitical realities are changing how wealth-management teams hire and operate, and may lower the barrier to access these services in the process.

Investing in automation

The growing success of robo-advisors like Wealthfront and Betterment has helped expand public access to wealth-management tools. While this has benefited end users, it has also forced incumbents to consider how they deploy staff, and how to do so at scale.

We probably won’t see UHNWI-focused wealth management firms departing too significantly from their high-touch operational methods, but we should expect automation, including robo-advisor-derived methods, to creep into higher wealth brackets. Individual advisors may start using AI more frequently to do more work, requiring headcount to increase at a relatively slower rate compared to customer growth.

Diversified portfolios

Consumers are increasingly aware of the kinds of investment vehicles that have, until now, been inaccessible to them. Private-market deals, alternative investments, and the like. Consumers signing up for wealth-management solutions now expect a wider range of wealth-generating products and services.

Wealth-management leaders ahead of the curve are building out the expert and engineering teams they need to react to these demands. From compliance leaders to blockchain-based technologists, wealth-management teams are shoring up their ranks.

Mitigating risk

Shifting liquidity and systemic risk realities and requirements will force wealth-management operations to accommodate new technologies and compliance experts. In particular, once the Financial Stability Board and the International Organization of Securities Commissions have released recommendations on liquidity management tools that fully align, wealth-management firms will have to rapidly implement these new risk requirements—requiring foreword-thinking and nimble hiring strategies.