The wealth management industry is in the midst of great disruption as economic forces, competition from new entrants, and client expectations mount. Wealth management executives consider natural events – such as floods and pandemics – to be the number-one industry disruptor, with almost 60% rating it as high impact. Other high-impact disruptors included changing client expectations and a global economic slowdown.

The wealth management industry faces disruption on multiple fronts

An analysis of the wealth management client journey revealed that firms are lagging behind in delivering personalized information and services. HNW clients are least satisfied with receiving personalized information or services during acquisition, advisory, and value-added services. This is especially concerning as these touchpoints were also found to be the most vulnerable to BigTech firms – high net worth individuals expect BigTechs to perform better than wealth management firms at these touchpoints.

Wealth management firms can mitigate BigTech incursion by boosting the wow factor at information-related touchpoints

Emerging technologies such as AI, analytics, and automation are enabling firms to enhance revenues through better client engagement and to reduce cost by streamlining processes. Emerging technologies are especially pivotal to growth potential in the areas of client acquisition, advisory, and value-added services, where they have numerous applications in driving greater personalization. With firms facing increasing margin pressures across the value chain, the right mix of build, buy, and partner, depending on critical focus areas, can help maximize profitability.

Cost and revenue dynamics are evolving across the wealth management value chain