As regional and global markets convene around environmental and social issues, businesses become more dynamic, and investors have new priorities, the wealth management industry is also evolving to cater to changing needs. Disruption has also been prompted by a shift in mindsets and priorities; besides heightened demand for personalised solutions, wealth managers and clients are also increasingly drawn to the intelligence of automated solutions for a higher value proposition. These trends, among others, are potentially paving the way for a new era within the industry. Wealth management will likely move from resilience in 2020 to reshaping in 2021 to lay the foundation for reinvention up to 2025. The emergence of new technologies; ecological and environment concerns; trend towards hyper-personalisation; shift from support to value generation enabled through technology; paradox of personal data; and rise of platform ecosystems – that could progressively impact the industry.
Three main trends will be digital wealth solutions, ESG investing, and evolving regulation. As customers continue to become more experienced and comfortable undertaking certain transactions digitally, especially the mass affluent segment, digital wealth solutions – or wealthtech – will be a key area of development. ESG has become increasingly important for investors to consider in their decision making, helped by the growing evidence that it can drive outperformance while contributing positively to society. Investment strategies incorporating ESG are growing fast and now account for over a quarter of professionally managed assets globally, while integrating ESG into mainstream financial analysis is also gaining relevance. The adoption of ESG investing is set to grow at an accelerating rate over the coming years, driven by asset owners, risk mitigation and return objectives. Digital wealth management tools are the future in an era of technological advancement and digital solutions being experienced in all walks of life. Digital wealth management solutions, like robo-advisors, enable leveraging technology, thereby enhancing scalability and reach to serve a larger customer base and improving overall customer experience. As businesses change hands with a new generation of owners arriving at the helm, a substantial amount of wealth will also see movement. As clients continue to seek purpose and new models emerge amidst growing awareness and digital disruption, the wealth management space may be at the cusp of a new dawn.