“We are moving away from products and towards services where the financial planning function is taking a central role in the client/banker relationship”

In recent years, the Wealth Management sector has had to face major challenges, not only financial but also regulatory, health, digital, etc… and the players who have adapted best during this time will be the winners.

In an economic environment where uncertainty is the main protagonist, the search for profitability for clients is a real challenge for any private banker. In the wake of the Covid19 pandemic, the recession, weakening economies, low consumer confidence, unemployment, rising global debt and low growth, has revealed the importance of having highly diversified portfolios, in line with client profiles and with containment investment plans. In addition, the low interest rate environment of recent years has led investors to seek returns in other asset classes, such as alternatives or crypto-assets, as well as a trend towards investments in social issues and assets based on equality, inclusion, sustainability and the circular economy.

Regulators are increasingly interventionist with the aim, in principle, of increasing competition, improving cybersecurity, protecting data, supporting and defending customers and improving trust in the sector. However, this implementation is a cost challenge for compliance departments in the correct application of the Financial Markets Directive (MiFID II) where institutions must also prepare themselves to apply the new requirements to incorporate sustainability factors in the management of their products.

Also as a result of the pandemic and the rise of teleworking, digitalisation is becoming the norm for customers with higher expectations of both operability and personalisation. Customer service is now key, where convenient, secure and continuously updated self-service capabilities are combined with mobile applications and always-on multi-channel advice.

New segments are emerging, especially ambitious and entrepreneurial young people whose HNWI parents are ageing, and it is not surprising that institutions are starting to tailor their digital and financial offerings to this generation. 

Our industry is still in the early stages of digital transformation, but all institutions are acutely aware of the importance of acquiring all the digital capabilities needed to ensure proper service.

These new banking regulations and ongoing digitalisation are forcing us to transform the wealth management business model. We are moving away from products and towards services where the financial planning function is taking a central role in the client/banker relationship. Relationship Managers are moving from being specialists to generalists (as they cannot be expected to be experts in all areas) and where they must be assisted by product specialists (Capital Markets, Private Equity, Forex, Markets, Tax Planning, etc…). Consequently, Wealth Management entities are implementing efficient processes that enable interaction between bankers, specialists and simplified platforms to ensure that HNWI clients are properly serviced.


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