eNewsletter Spring 2017
The Wealth Management industry internationally seems to be progressing rapidly to meet the needs of HNWIs, Millennials as well as to comply with regulatory requirements. An overview of the EY ITEM Club research findings published on WealthBriefing* state that “Total assets under management in the UK wealth and asset management sector are expected to rise 5.1 per cent this year to £1.1 trillion ($1.38 trillion), and reach £1.24 trillion by 2020”. “The report also shows that AuM in the wealth and asset management sector rose 12.3 per cent year-on-year to stand at just over £1.0 trillion at the end of 2016, which was a faster rate of growth than in 2015.”
“…The outlook for the UK economy is much better than many envisaged even six months ago, and compares well to other developed economies.” said Omar Ali, EY’s UK Financial Services Managing Partner to Tom Burroughes, Group Editor at WealthBriefing.
On the other hand, in MyPrivateBanking report on RoboAdvisors worldwide, it is becoming clear that the Wealth Management industry has embraced the FinTech approach of Robo Advisors, with many firms providing very good standards online services but with significant room to improvement. Further research on this topic also denotes the need to examine a Hybrid Robo-Advisors model. A snapshot of these researches includes some interesting points to the industry:
- The majority of robo-advisors offer an onboarding experience, but almost none across-the-board
- Client assessment, although good, would need to examine ways to improve their performance
- Greater transparency is needed, especially in terms of fees, product and process information
- Strong focus on fast customer acquisition might hinder the risk of too shallow collection and data processing during onboarding
- Utilising more aspects of behavioural finance during client assessments
- Robo-advisors would need to improve their offering in terms of financial planning
- Millennials, Baby Boomers and High Net Worth Individuals are becoming the key markets
- Robo-Advisors should focus on Onboarding, Regulation and broader Market appeal
- Traditional financial services firms should take advantage of the need for hybrid models
Combining these international demands in the industry with the EY findings that the AuM are expected to increase in the UK market, creates an opportunity for the existing Wealth Management firms to revise their technology infrastructure and enhance their service offering to the market. In addition, news on possible collaboration in the industry among established firms and startups, provide the chance to create a model that would allow a more pedantic client profiling with risk assessment techniques that will add value to the service, transparency in fees and regulatory framework (i.e. MifiD II, etc.), new available services such as a comprehensive financial planning and a ‘hint’ of human interaction to the automated investment process.
For such technology and market evolution, Profile’s Axia web-based, omni-channel platform has incorporated the functionality needed to deliver compliance to the firm, select the needed functions for the business, stand-alone client onboarding and financial planning modules as well as reporting to be delivered at each stage. It has been awarded for its sheer flexibility and design architecture that provide for fast, flexible and modular approach across all asset and wealth management operations.
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