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Megatrends driving organizational transformation among traditional wealth managers

Megatrends driving transformation among wealth managers

Megatrends driving change in wealth sector requiring enhanced advisor and client solutions.



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Sunlight through the trees

The wealth sector is experiencing unprecedented competitive pressures as traditional firms, Registered Investment Advisors, and disruptive new market entrants converge on the same base of lucrative investors. Margin improvements are difficult to achieve without re-thinking key aspects of the business and operating model. The growth challenge has already hit many firms. The traditional value propositions and service models offered by incumbent providers are not attracting new investors at the same rate as the overall market growth. 

These shifts in the wealth management industry are driven by a number of deeply-rooted forces - megatrends. As outlined in the Investing in the future report, from a demographic perspective, the needs and expectations of investors are evolving and the rapid pace of technological developments is creating new opportunities and disrupting existing business models. The world’s wealth management firms have recognized the need to respond by embarking on customer driven transformation programs. 

The path to transformation

The critical first step for effective organizational transformation is to refine the business model and place strategic bets around key growth markets and segments. Investments in deeper insights into customer needs and behaviors are often required to then sharpen the value propositions and service offerings delivered to meet these needs. 

With a sharpened business model in place, the firm can adapt their operating model to architect a differentiated service model which is positioned to attract and retain clients and deliver a more engaged and integrated customer experience across channels. Leaders can identify the significant capability gaps that require attention and then prioritize the transformation program investments that are best positioned to deliver meaningful client and financial outcomes. 

Existing governance models and leadership roles need to adapt to ensure proper business, customer and channel alignment. Looking at external drivers and the impact potential investments have on market and customer differentiation, this can be a significant change in how programs are justified and managed. 

Aligning customer and channel capabilities:

Next, an integrated multi-channel service strategy, enabled by the right business architecture and customer focus can help firms realize growth and margin improvements. To achieve, firms need to re-think key aspects of how the firm supports advisors and clients across channels. 

The services performed from the branch channel can be streamlined to focus on client-intimate processes. Administrative and support functions can be either digitized or migrated to more cost effective channels. Call center and digital channels are being repositioned to raise client awareness of additional service capabilities and satisfy growing demands for immediacy, personalization and self-service. 

We have found that an in-depth analysis of customer, channel and product profitability – including an examination of high cost, inefficient and toxic customer servicing processes can serve as a catalyst for re-thinking existing transformation program investments. 


Digital delivery responds to changing clients

The role of an advisor remains central to serving high net worth and ultra-high net worth clients. Digital strategies can drive new forms of customer engagement between advisors, the firm and clients to strengthen the overall client relationship. Traditional providers will need to deliver a very strong digital ‘core’ offering, which addresses crucial customer experience priorities and strengthens the overall relationship between the firm, client and advisor. Service differentiation is enabled by providing additional digital capabilities in specific segments to deliver enhanced services including risk management, estate and trust, and banking. 

Customer analytics to focus and operationalize the transformation:

Customer analytics and insights are critical inputs to re-focusing the business model, shaping new value propositions, and refined customer segmentation strategies: 

  • Mining internal and external information sources can drive deeper insights into customer wallet share and relationship penetration 
  • Integration of socio, demographic and behavioral characteristic data can help firms identify micro-customer segments. With these insights; marketing and communications strategies can be honed to deliver a more personalized approach to relationship development 
  • Predictive analytics and scenario based modelling can improve the effectiveness of relationship-based pricing strategies to attract additional assets and penetrate banking and lending needs. 


The wealth sector remains a very attractive business for continued growth across the globe. There are opportunities for firms to thrive in this evolving competitive landscape. Over the next 3-5 years, some firms will emerge as the clear leaders and ‘providers of choice’ in serving investors for the next decade. 

Capitalizing on this window of opportunity will require firms to embrace change driven by megatrends, sharpen their transformation agenda, and accelerate the delivery of innovative advisor and client facing solutions to deliver a differentiated service experience.

Opportunities to grow will only be realized when firms integrate strategy with rapid execution as the market becomes much more competitive. 

To access where your firm may be on the transformation continuum: 

  • Do you have a clear understanding of customer behavior, buyer values and needs by micro-segments?
  • Are you investing in the right capabilities to deliver a more engaged and collaborative client experience to attract and retain a more digitally savvy investor? 
  • Are the existing governance and oversight functions aligning investments across the organization to drive clear market and customer differentiation?
  •  Is the transformation agenda bold enough to address market and competitor movements?

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