Wealth Management Transformation: An Open-Ecosystem Approach

Bradley Northrop, Charlie White, Anton Wassell, David Jenkins

What does the industry look like today?

Low-involvement and easy-access Wealth service offerings from Digital investment platforms have sparked a new phase of competition. However, it remains clear that a ‘human touch’ is essential, as proven by the many standalone digital disruptors yet to scale effectively. Industry leaders have identified opportunities for digital platforms to support traditional advisory relationships.

The challenge for Wealth Managers today? Balancing the exciting pursuit of front-facing opportunities to enhance the client experience while simultaneously addressing core legacy systems, culture and talent gaps.

To address this, a significant marketplace of vendors is emerging for Wealth Managers to pick and choose their mix of applications, tools, systems and platforms. Successful integration of these technologies into the operating model is critical. ‘Plugging-in’ targeted digital capabilities, balanced with protecting the traditional adviser relationship and addressing core platform challenges, proves essential for sustained and scalable digitalisation.

The challenge for Wealth Managers today? Balancing the exciting pursuit of front-facing opportunities to enhance the client experience while simultaneously addressing core legacy systems, culture and talent gaps.

Key Areas of Focus for Wealth Managers

How do FinTechs fit into the equation? By differentiating the core activities of Wealth Managers, strategic FinTech partnerships offer a means for targeted improvement in specific activities completed by high-value business functions. They provide an avenue to accelerate digital transformation, with the flexibility to change direction if necessary.

The breadth of FinTechs developing financial planning capabilities demonstrates this. These enable Wealth Managers to efficiently capture, manage and assess clients’ requirements, helping to improve and automate the delivery of advice. FinTech-driven innovation is also enhancing client engagement at the outset through prospecting and onboarding, whilst delivering process efficiencies for Wealth Managers through workflow management and automation.

Across the industry many firms find themselves anchored by traditional business models with complex, rigid platforms. Adaptable Wealth Managers are proficient at fuelling an evolving client proposition, by identify the value-adding areas of their business and stitching advanced applications and tools into their operating model.

How can the full potential of FinTechs be unlocked?

Making the right choice with core platforms, and utilising data as a strategic asset, is central to the future success of Wealth Managers. Those leading the charge are characterised by cloud-based open-ecosystems supporting APIs and microservices. But addressing technical architecture is not all that is needed to maintain a successful ‘wealth technology eco-system’.

Wealth Managers can unlock the full benefits by targeting change efforts toward driving agility, facilitating innovation, establishing FinTech partnerships and shaping a clear Digital strategy. But significant transformational change does not happen overnight, and requires upskilling of existing teams to make empowered decisions. Those who succeed invest in training, career paths and knowledge transfer to transform ‘traditional’ project managers into strategic advisors and innovators for the business.

Think big, start small and scale fast. This mantra rings true for many successful business model transformation initiatives across Wealth Management. Yet scalable agility is difficult. The most common obstacles are clashing organisational values, a shared resistance to change, and insufficient sponsorship from leaders. Building change management expertise and nurturing an innovative culture  can help with identifying and acting on strategic opportunities at pace.

What are the implications for Wealth Managers? Alpha’s recent viewpoint on Digital for Wealth Management explains that clear direction on where to focus transformation efforts is key to maximising the business value from digital initiatives. Developing a future roadmap for transforming the business is not an easy exercise, but is necessary to capitalise on current and future opportunities.

How can Alpha help?

Between our Wealth, FinTech and Digital practices, Alpha has deep experience in Wealth Management combined with an understanding of best practices in digital transformation and FinTech partnership strategies.

Please get in touch to find out more about how we work with Wealth Managers and FinTechs across the industry.

About the Authors

Bradley Northrop
Senior Manager

Bradley has spent over 10 years working with Wealth Managers and Financial Planners helping with their business change strategy and to select, review and implement technology into their core proposition.

Charlie White

Charlie is a Consultant at Alpha with more than 3 years of consulting experience in the Financial Services industry. He has supported Asset and Wealth Management clients across numerous Transformational Change initiatives including operating model reviews, M&A activity, organisational design and Agile change programmes.

Anton Wassell

Anton is an Analyst at Alpha with experience in benchmarking, platform selection, M&A post-deal implementation and CRM assessment within Wealth Management. He helped establish Alpha’s Wealth Benchmarking study across trending areas such as digital interaction, client marketing and financial life cycle management, developing new metrics to assess these capabilities as well as the broader operating model and Client’s organisational structure.

David Jenkins

David joined Alpha having spent over 5 years working in the Wealth and FinTech sectors. Covering portfolio and client management as well as building financial products from concept through to product rollout, he applies his knowledge and experience to Alpha’s Wealth and FinTech practices. He is actively involved in RFPs, transformational change initiatives and FinTech vendor market scans with a focus on financial advice.