Agenda
Speakers
Highlights

Funds Congress Highlights

Navigating the Future of Wealth Management: Key Trends for 2024

Etienne Burger | Partner, Strategy, Insurance, Asset & Wealth Management, PwC
Alexandra Loydon | Director of Partner Engagement and Consultancy, St James’s Place
Terry Donohoe | Managing Director & Chief Executive Officer, Ignition Advice

The wealth management landscape is at a pivotal turning point driven by demographic shifts, market dynamics and evolving consumer preferences. This article explores the trends driving wealth managers, insurers and banks to evolve their business models to better serve different customer segments, including mass market, affluent and high-net-worth clients. Understanding the shifting landscape will be crucial for asset managers to navigate potential risks, seize opportunities, and formulate effective strategies.

Changing market dynamics: The wealth management landscape is set to undergo significant change in the years ahead. Ageing populations and related demographic shifts have led to a greater demand for intergenerational wealth transfer, creating new opportunities for product differentiation for the sector. The distribution ecosystem is also evolving, with disruption and challenge from fintechs and new entrants intensifying competition and pushing some to consolidate. Investment strategies are becoming more diverse, with the increasing use of multi-asset solutions and inclusion of alternative assets in retail portfolios. Regulatory change continues to also shape the market.

The client experience: Amid this complex and shifting landscape, ambitious players continue to focus on customer engagement. Changing consumer preferences have placed greater emphasis on bespoke solutions; greater demand for a digital experience from a younger generation is also driving new approaches in how institutions interact with their clients. Responses are becoming more dynamic, with a “customer first” approach founded on technology-based solutions that aim to gain efficiencies at the initial phase of the customer experience.

Industry responses: As business models evolve, established players and new arrivals alike share the challenge of securing customer access. Some banks are already participating in the retail wealth management sphere by leveraging their existing customer bases; insurers and other new players have looked instead to acquire companies for their customer networks, then built out wealth management offering platforms to match. A chief driver common to all is the desire to own as much as possible of the value chain, including the customer advisory element, the product offering, and the investments that lie beyond.

Technology and the challenge of retention: Unsurprisingly, technology will be pivotal in delivering tailored solutions that meet the demands of this changing consumer base. The challenge for institutions lies in dovetailing their investment proposition with a tech-driven front-end user experience. If a customer wants access to more complex investment solutions, particularly retirement planning, the customer journey needs careful design with well thought through choice architecture – not an easy task without some human intervention.

Regulatory changes: Increasing regulation is also driving development, including Consumer Duty that is still working through how providers and advisers operate. Regulatory scrutiny of growing retailisation in asset management, such as the EU’s European Long Term Investment Fund (ELTIF) measures, and the introduction in the UK of a new principle focusing on the delivery of good customer outcomes, will accelerate existing trends in the industry and ultimately improve client retention rates.

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