Spotlight on... Wealth & Asset Management: Predicted wealth management boom offers industry a chance for reinvention
By SEC Newgate's Wealth and Asset Management Team
With a steady stream of gloomy news seemingly lurking around every corner, my attention was caught by a report from Bain & Company out earlier this week with stats that will likely be an angel’s chorus to the ears of CEO’s up and down the country – demand for wealth management services is set to double by 2030 to more than $500bn. Whilst this is no doubt reassuring to many, it does come with caveats; chiefly, that customer demographics will become increasingly fragmented and difficult to reach, and any business that doesn’t want to embrace digital/hybrid technology may as well throw in the towel now.
What is crystal clear however is that the wealth management sector has an incredible opportunity for growth – and an incredible opportunity for transformation. Our wealth & asset management team offer their insights below on the kind of change they would like to see from a sector which has the potential to remake itself from the ground up.
- A change in attitude towards wealth management– “People need to think about getting financial advice in the same way they would get legal advice. Financial advice is for everyone – the industry needs to pull together to normalise paying for advice upfront and help the public understand that it is important to get advice from qualified, regulated experts, as well as helping them navigate where to find these advisers.”
- The sector needs to think of itself as a ‘Corporate Citizen’ – “Wealth management may be made up of many large and smaller firms, but collectively their power to create change should not be dismissed. Wealth management firms have an incredible amount of influence on the flow of capital and adopting a Corporate Citizen mindset could help some of the best financial minds in the country help innovate solutions to existing problems with widespread financial inequality.”
- Look beyond the pound signs – “Financial advice is not pitched for the masses and is currently aimed at those with a certain level of assets. DIY investing is available to the majority but continues to exclude many as you still need to be investment savvy and have some knowledge. What is missing and lacking from the wealth management industry is financial education which needs to be taught from a young age. Even for those wanting to learn how to invest there is an insane amount of jargon and myth busting that they need to wade through which puts many at a disadvantage. Rolling out financial education in schools, colleges and university is an absolute must if we’re to help protect the future generation’s wealth. Investing and financial advice shouldn’t be exclusively for the 1%, it should be available for all.”
- Evolve the terms of property investing – “More provision should be made for advice on property investment. As much as landlords get a bad press, property prices have only moved in one direction over the long term and have proved a sound investment for many. There are schemes which help investors support social housing projects and even some that help tenants to buy. It would be great to see more innovation and support in this area to open up property investment for all.”
- Run, don’t walk, on diversity – “The industry has come a long way over the years but there is still a significant lack of female financial advisers and wealth managers. Household finances have changed, men no longer hold the reins and women no longer remain silent in the background. Women often have their own finances and are responsible for managing the household finances. They need to be involved and part of the conversation, they need to be acknowledged as equals to men when it comes to finances. The industry could do so much better in ensuring there is a balance of men to women financial advisers, starting at the grassroots level in schools.”