How Wealth Advisors Can Manage Rising Costs, Digital Transformation and Client Expectations and Achieve Profitability and Growth

By Valuefy

May 29, 2023


The wealth management landscape has shifted dramatically in recent years. Wealth managers are facing a new reality of rising costs, accelerating digital transformation and heightened client expectations for quality of service. But what do these challenges really mean for wealth advisors and how can they overcome them?

Rising Costs, Digital Transformation and Client Expectations

A host of factors are disrupting how wealth advisors operate as they grapple with rising threats to their business model and greater costs of doing business. These challenges stem from multiple sources including increased account aggregation, greater passive investment, the decline of fee minimums, cost inflation across technology, salary and other expenses, and a global regulatory push towards transparency, suitability and lower fees.

As costs are rising, so are client expectations. Clients are seeking both, higher returns through alternative investments and sophisticated investment risk mitigation and diversification in a challenging and unpredictable world. They are also demanding a seamless, convenient and personalised client experience. Increasingly, they expect this to be delivered through a hybrid of in-person and virtual engagement, often across multiple jurisdictions and geographies. Additionally, environmental, social and governance (ESG) investing is firmly on the radar of most clients. They are frequently considering ESG factors alongside traditional financial metrics to invest in a sustainable and responsible way.

Consequently, wealth advisors are facing increased client expectations for high-quality service, broader product offerings and sophisticated investment advice at a time when business cost and complexity is rising.

Technology Drives Profitability and Growth

Advisors are leveraging advanced technology to adapt their strategy and operations to this new reality. This can help them deliver the intuitive digital experience investors seek, provide a broad range of sophisticated products and services, and enhance the quality of investment advice. Crucially, it enables them to provide this improved offering while also enhancing operational efficiency and reducing cost.

For example, advisors are investing in enhanced data management to aggregate, standardise and harmonise data across multiple custodian, broker, currency and product data sets. This ensures data is available in the correct place and format for investment analysis, portfolio management, portfolio reporting and client service. They are enhancing the monitoring of portfolio insights, building holistic views of assets across portfolios, implementing advanced attribution and visualisation capabilities, and using open APIs for upward and downward integrations and to scale and expand. With the right technology, they can do all this while maintaining effective oversight, control and cost efficiency.

Achieving Business Results as Pressures Mount

In this challenging environment, the pressure is mounting for wealth managers to improve business performance and competitive advantage and deliver superior digital services and investment outcomes for clients. A technology-driven wealth management approach is crucial for wealth advisors to remain profitable and deliver sustained growth in a fast-changing market.

For more information about Valuefy’s wealth management technology solutions please contact us.

Get in touch to arrange a meeting to explore these themes in more detail and discuss our insights in wealth management technology.

About Valuefy

Valuefy is a premier investment technology lab with cutting-edge solutions serving leading financial institutions across the globe. Its Wealth Management Solutions has enabled Wealth Managers globally by providing production-grade investment technology solutions for an uberized customer experience.

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