BANKING
“ COMPETITORS SHOULD RE-EVALUATE THE PRODUCTS CURRENTLY OFFERED AND INCORPORATE DIGITAL ASSETS AS PART OF THEIR PORTFOLIO ”
ALISTAIR SHIPP CAPCO
New trends in the wealth management space As innovative technologies continue to flood the marketplace , fintechs are under pressure to present customers with the latest , greatest and fastest offerings at a lower cost if they are to compete .
Alistair Shipp , Executive Director of
Capco , explains : “ A changing of the guard is underway within wealth management , with a younger cohort of Millennial and Gen-Z investors forcing firms to rethink their product offerings and client services ’ model . Driven by evolving client demographics , demand for customised investment solutions , enhanced technology , and industry consolidation , firms that serve the younger generation will be well positioned to capture asset growth .
“ A key differentiator will be how firms truly educate and engage these new investors and go beyond any minimum requirements that may be set out as part of the FCA ’ s Consumer Duty regulations .
“ Firms are competing on the next wave of growth within products , including : digital assets , ESG , and custom indexing ; client
THREE LEADING WEALTH MANAGEMENT TRENDS
Shipp outlines three main trends currently reshaping the space . They are :
Women in Wealth : Despite being regarded as a niche client segment within wealth management , women are positioned to be one of the largest beneficiaries of the multigenerational wealth transfer and are increasingly becoming the primary financial decision maker within households , as evidenced by the younger cohort of Gen-Z and Millennial women . Women tend to prioritise long-term goals and an increasingly mission-driven view of investing compared to men . Wealth managers must tailor their service model to meet women ’ s unique preferences , as this growing cohort presents a significant opportunity to provide advice and acquire assets .
ESG : Investors are increasingly looking to align their assets with environmental and social goals . Beyond the social aspects , there are material performance implications for firms that embrace the initiatives . There has also been pressure from regulators , asset managers , and governments to provide better ESG disclosure .
Custom Indexing – The Next Battleground : Direct Indexing is set to outpace the growth of ETFs , Mutual Funds , and SMAs over the next five years , as investors seek customised investment solutions that align with their ESG objectives while optimising tax management .
44 June 2022