Technology investment is a wealth managers’ top profitability play

By Paul Bebber
20 April 2020

Wealth managers may have no silver bullet for enhancing their profitability, but for many technology is as close as it comes.

We hear a lot at the moment that most firms are putting spending on hold, while they try and assess the situation, but if they want long term profitability technology is important. Firms that balance short term measures with long term efforts will emerge more competitive.

A tenth of respondents to this year’s WealthBriefing and SS&C Advent Wealth Management Technology and Operations Trends report said they were investing in technology as a way to protect and promote their profitability.

Promising news, but if wealth managers think throwing money at IT systems will solve their profitability issues they are in for disappointment.

Selecting the right solutions from an increasingly crowded technology field is key. That means picking platforms that not only offer comprehensive functionality, but can deliver the specific capabilities and support the individual firm needs now and in the future. Flexibility, richness, scalability, and a commitment by the provider to ongoing investment and development all matter.

So what are the most important considerations when choosing a technology partner for the long haul?


Key things to consider

  • Will the platform offer complete asset class and currency coverage, to give you the capacity to support clients’ widening search for returns, diversification, and asset protection?


  • Are sophisticated performance analytics available to demonstrate how client portfolios are performing, and where you are adding value?


  • Can you present portfolio holdings, transactions and performance information through customised reports tailored to client preferences?


  • Can you offer a clean, user-friendly portal where prospects and clients can open or amend accounts, research products, access advice, and view portfolio information?


  • Is it in an integrated technology stack that spans your entire enterprise from the front, through to the middle and back offices? How does it help you control and access all your portfolio and client data, and deliver high-quality customer experiences that strengthen your relationships?


 Cost cutting

Enhancing profitability is not just a matter of focusing on ways to drive top-line revenues. Strengthening the bottom line by optimising operational efficiencies is also a top objective for wealth managers.

Technology is one way to increase automation and therefore processing speed, accuracy, and operating efficiency. Outsourcing offers another option for reducing costs. Operational services that can supplement, extend and complement wealth managers’ existing capabilities can be an effective way to strip out unnecessary overheads, improve servicing quality, and remove the burden of non-core/low-value activities.


Are you committed to maximising profitability?

 What firm wouldn’t want to strengthen its competitive edge and fuel its profitability? The question is, which institutions will really do what it takes to get there?

To achieve the transformational change and reap the benefits that technology and digitalisation can bring requires wholehearted commitment from the top. Projects need to be prioritised and backed by appropriate levels of support across the whole organisation.

C-level executives shouldn’t underestimate the scale and complexity of what’s involved. But it is unavoidable. The greater risk lies in failing to change.