The Wealth Management sector has rapidly evolved in recent years and has become digitised to a considerable extent, creating certain trends that we must bear in mind in 2023.

1. Digital solutions focused on the end client

Wealth management platforms are increasingly client-focused to facilitate their access with simple user interfaces designed for their ease of understanding. In this way, customers can analyse and review their portfolios, calculations and even sign proposals more quickly and efficiently from the entity’s client portal. The customer demands to be able to see, at the very least, the updated status of their investments at all times. Entities need to continue providing added value to their clients in order to win their loyalty and, at the same time, defend their clients against other competing entities.

2. Aggregation of non-custodial positions

Entities are “greedy” for data and, therefore, need to have more information about their customers. They are aware that this data is often the differential value. Based, although not solely, on the PSD2 regulation, the entities propose to their clients to add those investments not under their safekeeping to their platforms, in order to offer them a better advisory service. The reality is that with this “extra” information, entities can attract new assets much more effectively. Most large financial institutions are exploring ways to “converge” in order to diversify revenue streams and serve customers more comprehensively.

3. Regulation

Year after year, regulatory authorities impose legislative changes that affect the financial sector. In addition to being mandatory, these regulations promote ways of greater communication and transparency between advisors and their clients. Although the SFDR regulations have been in force since last August, in 2023 it will be crucial to launch new suitability tests that reflect clients’ ESG investment preferences in terms of sustainability, reporting and control. This will be a priority for any entity that offers advisory services and discretionary management.

4. Cybersecurity

Financial institutions continue to invest in security to protect themselves from cyber attacks that could compromise their clients’ personal and financial data. Investment in secure platforms also climbs to the top positions.

5. Hybrid advice through Robo-advisors

These platforms allow financial institutions to deliver discretionary and advisory services. They provide value to personally and digitally attend to a large volume of clients, whilst offering them a personalised service.

6. Digital Onboarding

The digital onboarding process allows new clients to send their documentation online and with complete security, even for the investment proposal signing process.

7. Multi-channel and interactions through the entities’ Apps

Wealth management niche solutions must be designed (APIfied) to easily and safely undertake light integration processes with existing subsystems (e.g. commercial CRMs). In this way, comprehensive data is made available to multiple channels through a single central repository.

8. Diversification of investment products

Clients not only invest in stocks, funds and bonds but also in cryptocurrencies and crypto assets (real estate, art, financial products), seeking to diversify their portfolios and increase their returns while controlling risk at all times.

9. Risk management and adequacy of commissions

The protection of client assets in scenarios of recession and uncertainty, with high levels of market volatility, will be, once again, one of the primary goals for financial institutions, although not the only one. Commissions applied by the entities must be adapted to the new times.

All this leads us to increase efficiency and differentiation in the provision of services and this will only be achieved through greater process digitisation.

10. WaaS (Wealth as a Service)

Now that it has been resolved and agreed that legacy “on-premise” platforms are no longer required for information security reasons, it is observed that there is a strong trend in the sector to adopt asset management infrastructures as a service. The cloud migration of these services goes hand in hand with the adoption of digitisation.

In conclusion, financial institutions that adopt the aforementioned trends:

– Will have a better chance of prospering in an increasingly competitive market.

– Will be better able to scale their offers and provide an excellent experience, using technology to overcome operational, regulatory, and efficiency challenges that simply cannot be resolved by building larger, more resourceful, and more expensive teams.

The industry is already taking the necessary measures to successfully face what will surely be another challenging year. Are you joining us to provide the best services to your clients?