Page 31 - Investment Advisor June 2023

time on high-value, high-touch client interactions,”
explained Kevin Keller, CEO of CFP Board.
Trends in the High-Net-Worth Space
The challenging investment environment of the
past few years has made it hard for wealth manage-
ment firms to generate superior investment returns
for their clients. At the same time, competition is
also pushing firms to find new ways to grow. These,
as well as other factors, are driving change in the
wealth management industry in 2023, according
to Capgemini’s latest Wealth Management Top
Trends report.
Clients, of course, are also a driving force.
Women and mass affluent investors have unique expecta- may be the following: as more offerings are commoditized, and
tions and preferences, and nearly all clients want digital-first more clients expect greater convenience, self-directed digital
engagement and seamless customer experiences. Add to this platforms and a la carte fees, how will wealth management
the proliferation of cutting-edge technologies, investors’ fluc- firms distinguish themselves, continue to grow and justify
tuating asset allocation preferences and demographic shifts. rates?” posited Anirban Bose, CEO of Capgemini’s financial
“The overriding question for relationship managers in 2023 services strategic business unit.

regulatory headwinds: The volume, speed and complexity areas of investment focus:
of regulatory change are creating new obligations for broker- • Rapidly scaling models
dealers, and meeting new requirements often demands limited • Alignment and integration of technologies
resources that they could otherwise invest in growth. In 2021, • Robust governance structure and process
financial institutions spent some $210 billion on compliance, The Digital Driver will have proprietary technology, digital
up more than 15% from the previous year. enablement, data-driven decision making and lean structure.
The study found the weight of compliance has a larger effect Its main areas of investment focus:
on smaller firms, with 71% highlighting regulatory demand as • Data acquisition
their primary headwind against growth, compared with 54% of • Enhancing technology stack and infrastructure resilience
larger firms. • Digitizing process and employee/client experience
Future plans: As broker-dealers compete for clients and The Product Sophisticate will be characterized by a narrow
market share, they have several options for navigating these but highly specialized product set, focus on niche client needs,
changes by rethinking their priorities and adapting their focus specialized knowledge and resourcing and purpose-driven
to new realities, according to BnY mellon. technology and processing. This archetype’s primary areas of
One option is to re-examine product and solution sets, identify- investment focus:
ing the capability set required to capture value within target rev- • Product differentiation
enue pools. Another is to automate and digitize their processes. • Subject matter expert talent acquisition
Broker-dealers also can redefine the target market by ask- The Regional Champion will be the dominant/market leader
ing which client segments they have the strongest positioning in one region supporting local market and inbound needs, have
and relationships with. Reshaping hiring and retention is yet a product set built around local market needs and offer a local-
another option, identifying the next-generation skill sets they ized provider network. Its primary areas of investment focus:
need. eighty-three percent of respondents plan to increase or • Local utility integration
maintain headcount. • Adapting products for market needs
The Global Giant will have a global footprint, a broad prod-
Archetypes for success uct set, a broad client base, significant capital/balance sheet
BnY mellon has identified five operating archetypes it says capacity, extensive data access and scaled resource and infra-
will define broker-dealer strategies between now and 2030. structure. This archetype’s main areas of investment focus:
The Alliance Builder will have specialized product or technol- • Technology/data interoperability
ogy capacity, be agile and flexible, have rapid access to leading • Mergers and acquisitions
capabilities and enhanced expertise and resources. Its primary • Digital client platform

June 2023 Investment AdvIsor 29