We all know how much more shiny, new and efficient our devices can feel after a software upgrade. Brands like Apple will do around one major update every year and take the heavy work off our shoulders by automating the process. But what about our companies? Are wealth managers upgrading every year? And what are the tell-tale signs that a big one could be well overdue?
Here are five surefire signals that your firm needs a software update.
1. Your data is siloed
If your wealth management firm has not yet moved onto the cloud, you are probably working in data siloes. This means that the front, middle and back-office departments don’t work from the same pool of client data and will likely need to each re-upload information manually a lot. As well as duplicating, triplicating, quadrupling or even quintupling workloads, this also increases the risk of error, inconsistencies and inefficiencies. Nearly three quarters (73%) of data breaches involved a human element in 2023.
If an existing client has a change of circumstances, for example, this would not be automatically updated for every function at the same time with traditional systems. The historical reason for this was because the 80s mainframe technology – while revolutionary at the time – could only function in monoliths. This no longer makes sense in today’s world where cloud technology allows everyone to draw data from the same place, known as a “single source of truth”.
Today 91% of banks and insurance companies have either completed or are in the process of moving to the cloud. Research from Accenture, however, found that just 8% of wealth managers have done the same, leaving lots of room for innovative firms to get ahead.
2. Skilled employees are wasting time and getting stressed
If it seems ridiculous that highly qualified and expensive employees like compliance officers, relationship mangers or financial advisors are wasting time on repetitive admin… that’s because it is. As well as sucking up precious time, and risking human error, it’s also making wealth managers unhappy.
“Achieving greater productivity” is the number one stress keeping UK wealth managers awake at night. Client relationship managers suffer the most with this, averaging a productivity score of just 5/10 according to 2024 research. Over time this adds up to days, weeks and even months of opportunity costs, wasted on unnecessary admin that could have been done in seconds by a robot.
Automating the straightforward parts of onboarding, KYC, risk assessment, portfolio rebalancing and more means experts can spend their (expensive) time adding value, rather than checking boxes.
3. There’s no digital self-service option for clients
Across the whole client spectrum, investors are demanding better online channels. Over three quarters (77%) of Ultra High Net Worth (UHNW) individuals agree that access to a 24/7 digital service like a non-negotiable when selecting a wealth manager. Likewise, 55% of High Net Worth (HNW) clients value digital capabilities.
Straightforward and seamless apps are no longer desirable, they’re expected. Increasingly, they’re looking for self-service options so they can do some DIY investing from time to time.
If your firm is not providing this – ideally in a hyper-personalised and intuitive way – you could start to lose clients. More than a third (22%) of High Net Worth (HNW) clients abandoned their wealth manager in 2022 for one with “improved digital capabilities”. And 47% of HNWs are unhappy with their current online experience too… paving the way for more relocations.
By 2045, $84 trillion will have passed from one generation to the next, in the great wealth transfer. Without digital self-service options, wealth managers will struggle to catch up and hold onto their assets under management.
4. Your firm is not offering a variety of products and investment thresholds
White label solutions offer a scalable and cost-efficient way to grow assets under management (AUM). Not only can firms expand their product shelf without reducing the quality of services, but they can also welcome a much wider range of clients.
With traditional manual processes, the only way to make wealth management financially viable is by only taking on HNW or UHNW clients. However, white label services are almost entirely automated and often self-driven. This means that firms can welcome affluent investors with smaller wallets too.
In terms of the product shelf, HNWs have made it clear that they are seeking much more consolidation of their financial lives. By offering for example, Self-Invested Personal Pension (SIPP) services, Individual Savings Accounts (ISA) and more, wealth managers can vastly increase their AUM. In this article, we show how if just 250 clients opted for a junior SIPP for two children, that would bring in an additional £4.5 million for managers each year. This is just one option but imagine the power of combining multiple new products.
What’s more, by automating the admin of existing investment products, resources are freed up to introduce new personalised services like tax planning or estate management.
5. Processes like onboarding are taking too long
A surefire sign that your wealth management firm needs a software upgrade is when things take too long, especially compared to competitors.
One of the most head-aching-inducing roadblocks for relationship managers today is the thorny issue of onboarding times. Taking an average of 14- 22 days, it’s little surprise that two thirds of clients will abandon the process halfway through. When you compare this to the same-day or same-10-minute onboarding times of digital banks, it’s easy to see the frustration.
Significantly, many clients will lose faith after enduring an underwhelming digital onboarding experience. This first encounter can leave a bad taste in potential clients’ mouths, while the glacial pace is like death by needle.
But it’s not just the onboarding that sucks up precious time. Duplicating work, tick-box activities and multiple workarounds add up. If you can do the same task in half the time in another industry – like open an application, schedule a meeting or generate a report in seconds – your firm needs an upgrade.
Upgrading starts with a call or email
For firms urgently in need of a software upgrade, you can contact us for a free and impartial conversation. As well as suggesting ways for you to save time, we also find ways to bring you more money, bringing you a true return on investment.
