Reimagining wealth management & private banking for the next generation [webinar review]

Earlier this month over 40 senior leaders from across 30 Wealth and Private Banking firms gathered to consider the biggest trends impacting their industry, the resulting challenges and opportunities faced today, and potential responses over the months and years to come.

While COVID-19 understandably remains top of mind for many business leaders, it is not the biggest, and unlikely to even make this group’s top three, trends impacting the Wealth and Private Banking segment in the near to medium term.

Three experts led the discussion. Matthew Grimes, Sales Director at The Penny Group and former Head of Business Development for Barclays Wealth, shared his insights on the underlying trends reshaping the client base and their expectations.

Graham Kellen, Chief Technology Officer at Schroeders Private Wealth outlined the business challenges and opportunities related to these trends.

Brandon Bichler, Partner at Elixirr, framed how leading firms are both delivering on current objectives while scanning and adapting to the evolving landscape.

Following the panel conversation, the audience gathered in zoom breakout groups to reflect on and respond to what they heard.

While areas of consensus emerged, some themes triggered differing perspectives. Overall, one thing was abundantly clear; the industry was in a historic inflection point before COVID-19 and those trends are only accelerating.


Client Trends: Advice & Client Experience

Early in the conversation, a clear distinction was drawn between the trends impacting how Wealth Management and Private Banking firms advise their clients and the trends impacting the overall experience as clients engage with a firm’s products and services.

Advice relies on the trust developed between an expert and their client. The current pandemic and the ensuing economic climate, public health concerns, and general uncertainty have dramatically increased the need for and value of trusted financial advice.

As complexity, challenges and concerns continue to grow, so too will the need to speak with an expert advisor. Bots cannot, nor will they soon be able to, listen closely and provide tailored, strategic financial advice and clarity in the midst of a global pandemic.

However, the breadth and depth of advice required is likely to evolve to meet evolving client needs.

Increased diversity in the client base seeking Wealth Management and Private Banking services also means greater diversity in the level of clients’ financial sophistication and therefore a need for different levels of guidance.

When it comes to core products, a perpetually low rate environment and changing attitudes to long term debt means the psychology around debt and equity is also evolving and advisors evolve as well, ensuring they remain their client’s trusted expert.

Excellent client experience is also characterised by reducing complexity and challenges, making it easy for clients to complete tasks and interact with the products and services they have purchased.  The increasing diversity of the client base is also driving the growing importance of the client experience.

But the similarities end here. Unlike trends in the Advice domain, the discussion highlighted considerable opportunities to apply technology solutions to improve the overall client experience.

Clients, accustomed to the ease and personalisation of consumer technology, increasingly expect highly personalised, efficient, effective and even delightful experiences from their Wealth Management provider and Private Bank.

The audience resoundingly agreed with Matt, as three-fourths felt that either the client experience or evolving demographics would be the single biggest client trend impacting Wealth Management and Private Banking in the near to medium term.


Business Challenges and Opportunities:

While the client trends discussion resulted in broad consensus around key drivers, Graham Kellen outlined the challenges and opportunities businesses face when it comes to delivering for clients.

He highlighted, “Those firms that win will understand what client experience is about”.

However, he also noted, “It won’t be easy, entire processes need to be reimagined to remove friction, reduce client effort and personalise services.”

This needs to happen while simultaneously providing stable, reliable advice and services amidst the current economic uncertainty.

Throughout the discussion panel and audience members highlighted numerous competing challenges and opportunities.

  • The Wealth Management and Private Banking industries are notoriously slow to change BUT COVID has accelerated many firms’ willingness to try new things and some firms noted an incredible acceleration in the pace of innovation in the past 5 months.
  • Regulation has increased, more rules result in more complexity that adversely impacts both Advice and Client Experience BUT there is an opportunity to reimagine entire processes and digitise particularly repetitive processes, seamlessly embedding compliance, creating space for critical, tailored, human interactions.
  • Cost challenges are very real BUT there is an opportunity to hire a new generation of advisors to serve a more diverse and younger demographic AND invest in digital services to reduce the cost to serve.
  • Digitisation can help reduce costs BUT its most valuable impact will be to improve and enhance the client experience.
  • Delivering quality advice will become increasingly challenging and clients will continue to expect more from their advisors BUT the breadth and depth of technology solutions available to enhance the quality and personalisation of advice an Advisor can deliver is also increasing.
  • Some processes and interactions are unlikely to be automated or digitised BUT they can still be significantly improved by focusing on better person to person interactions that enhance the overall customer experience.
  • Expectations of hyper-personalisation place greater demand on business operating models and processes BUT there is a big opportunity to bring in best practice from other banking segments around data management and data insights to enable more tailored client experiences.

Reflecting the diversity in the conversation, when polled, the audience’s view on the biggest single Business trend impacting the sectors in the coming years was also varied. Though two-thirds felt either digitisation or challenging business economics was the primary driving trend.



Meeting Today’s Needs While Innovating for Tomorrow:

Brandon Bichler has led strategy and innovation consulting engagements with numerous Wealth Managers and Private Banks. He outlined a simple framework that leading firms apply to balance the competing demands of day to day delivery with innovating to meet near and medium-term challenges and opportunities.

Leading firms divide how they think about their business into four zones:

  1. Sustain: the majority of employees, operations and effort are focused on performance, serving clients, delivering the P&L, and day to day objectives.
  2. Continuous Improvement: a number of small teams across an organisation are dedicated to efficiency and effectiveness efforts, improving current operations, often by applying proven technology and usually focusing on a one-year horizon.
  3. Incubation: small, cross-functional teams operate outside of business-as-usual. They focus on horizon scanning, usually on a 3+ year term, to identify emerging opportunities and challenges. They then develop hypothesis to identify potential responses and apply design-led iteration and rapid testing to surface the best solutions – often focusing on emerging technologies.  These emerging solutions are then incubated until they are considered to be “green shoots” and embedded into the business.
  4. Transformation: while this term is oftentimes used to refer to both large and small change, in this framework it refers to deep changes that only happen every 5-10 years. These profound changes are often driven by the need to defend or respond proactively to profound market disruption.

In terms of specific areas of innovation that firms are actively exploring today, Brandon highlighted several areas.

Personalisation was a consistent theme throughout the discussion and top of the list in this part of the conversation.

Wealth Management firms are focusing on bespoke offerings for female and next-generation clients in particular.

They are also exploring unique platform offerings that enable niche investing opportunities with a focus on ESG investing, theme led investing and exposure to alternative assets.

Aligned to the discussion around client experience, day to day operations are also a focus area for innovation – from digital onboarding to e-signatures and account aggregation solutions.

Finally, data was also highlighted, as some firms are exploring incorporating data analytics tools, traditionally used in hedge fund firms, making them available to sophisticated Wealth Management clients.


Unprecedented times, unprecedented opportunities

The pandemic has accelerated many trends that were already impacting the Wealth Management and Private Banking sectors and which will continue to play out in the coming years.

The group of 40+ leaders recognised that these two sectors have not traditionally been quick to innovate and change.

However, the vast majority agreed that in the coming years innovation is very likely to be a top priority for all successful firms.


Watch these three industry experts from Schroders Personal Wealth, Elixirr, and The Penny Group debate:

  • The wealth management and private banking customer of the future
  • How wealth managers and private banks are adapting
  • The innovations that will drive recovery and reimagination for the next generation of clients



To find out more about how Schroders Personal Wealth can support you as an individual or as a business please contact:

Leigh Dunkley
Business Development
07468 750839