7 Ground-Breaking Wealth Management Trends To Watch Out For!
- 19th September 2022
- Online Learning
Global wealth has dramatically increased in the past decade and private wealth managers have been working hard to help investors navigate the complexities of the financial markets. Let’s get into the lucrative career tracks in wealth management and advising - we hope you are as curious as we are!
It’s quite common to feel confused and lost when it comes to planning tax strategies, investments, and expectations after retirement. Wealth management services are considered the best route to get the financial help you need and take the guesswork out of your financial planning!
Wealth management refers to leveraging personalised strategies to increase the return on investment for assets, based on the specific situation and financial needs of a client. Some of the most popular wealth management services include tax savings, retirement, private accounting, and estate planning and investment advice.
Read on to learn how to understand and analyse the top trends in the wealth management industry in 2022.
Techniques That Wealth Management Experts Swear By!
A recent review published on Deloitte states that wealth management firms are considering several actions to position themselves back in the driving mode to combat the impact imposed by the COVID-19 pandemic. Some of the positive responses of the wealth management sector to remake itself post lockdown include:
Implementing passive strategies for lowering costs - the purpose is to generate a spike in interest via high-level performance to win back investors and grow assets by conducting better repositioning.
Mitigate generational divides by adopting digital channels - Most wealth management firms have started to rely on electronic means to attract a larger customer base, including social media to connect with clients across the globe and curate customized emails with the help of artificial intelligence.
Holistic financial planning to overcome challenges in times of uncertainty – This refers to the trend of integrating more comprehensive planning advice, which can help financial managers build profitable relationships with clients and lay consistent focus on asset gathering efforts.
Overview of Wealth Management in the UK
An annual report released by the global sustainable investment alliance (GSIA) mentions that 35.9% of the total assets under financial management worth around €35.4 billion at the beginning of the COVID 19 pandemic in 2020, has now risen to over 15% in 2022 in the entire EU. Similar results were found by the 2022 European sustainable investment fund, study published on the Association of the Luxembourg fund industry (ALFI’s) website.
The key findings from the research have projected an upward growth of 71%, reaching almost €2 trillion at the end of 2021, globally, 16% of which includes the total net funds domiciled assets in the EU!
Top Wealth Management Trends
In order to capitalise on market opportunities, the wealth management sector strives to develop new investment models to make informed financial decisions, constantly. This not only allows financial managers to help business firms stay afloat during the most significant changes in the market but also remain competitive, by improving operational efficiency using big data insights.
Below are the top wealth management trends for 2022 that have allowed this industrial sector to move past the worst of the pandemic and grab opportunities for clients who wish to adapt and adjust.
1. Investment strategies
Wealth managers prefer to stay ahead by hedging and diversifying against inflation, following certain strategies that include investing in alternative energy sources, including gold as part of a client’s financial portfolio and generating more rental income.
2. Digital integration
Wealth advisers are expected to be willing to explore digital assets such as Bitcoin and Cryptocurrency, which are typically considered growing investment options within the financial sector. The expanded use and legitimacy of cryptocurrency, in recent times, further emphasises the security and financial stability that digital assets have in store for you.
With global inflation reaching its highest levels in 40 years in the UK due to the COVID-19 lockdown disrupting supply chains, mitigating the likelihood of recession by implementing wealth management innovation is the best route to overcome threats against the global economic outlook.
4. ESG management
The last two years of the COVID-19 pandemic have initiated a crisis in all areas, including economic, political, social, environmental and public health. Focusing on sustainable investments can help companies contribute to positive outcomes and reflect on their values even during times of distress.
5. Augmented and virtual reality
Leveraging technology to personalise wealth management services have led to optimal enhancement of capital generation and is proclaimed to be one of the best ways to drive brand trust and loyalty. This involves the integration of robotic process automation and artificial intelligence to maintain personal wealth with fewer resources and less time.
6. Compliance cost management
Streamlining wealth management processes and reducing expenses by making changes within the regulatory landscape is one of the finest approaches to managing liquidity risks. This is also considered an appropriate method of providing greater visibility of liquidity monitoring and automating several reporting tasks.
7. Adoption of open APIs
This unique wealth management technique allows financial managers to showcase considerable data expertise via the faster deployment of regulatory and domain knowledge to build a large customer base. The development of Application Programming Interfaces has also allowed businesses to attract new projects and retain their existing clients.
What Are the Key Challenges in Wealth Management?
Choosing a wealth management career path will require you to demonstrate resilience to geopolitical challenges and recent market volatility, to enable asset firms to attract regulatory and competitive interests. Undergoing a financial management course in the UK can help you get a better understanding of a brand’s current capabilities and digital priorities, to accelerate asset mobilisation by implementing relevant transformative initiatives.
Here’s our list of the key challenges within the wealth management sector.
- Client backgrounds are quite diversified - this refers to the changing needs and demands of the clients in terms of different service expectations and the requirement to upgrade propositions for digital savvy investors regularly.
- Digital demands – with the continued rise in expectations of new generation clients, wealth managers strive to keep up with the evolving lifestyles and grab opportunities to enhance operational capabilities.
- Competition - the increased competitiveness within the international foreign markets has been keeping wealth management professionals on their toes to remove any structural inefficiencies, as well as stay up-to-date on new market entries, vertical integration and asset consolidation.
- Operational and technological inflexibility - the wealth management sector Is expected to demonstrate quick resolutions to operational threats, regulatory changes and competitive pressures by implementing flexible and quick responses.
- Regulatory overheads - choosing a management career will require you to showcase effective problem-solving skills to gather, control and analyse data-intensive regulations, as well as overcome structural reforms such as the rise of low-cost alternatives and commoditization of investment funds.
To become a wealth management expert, you must be efficient at planning current and future requirements in order to achieve business succession plans. Qualifying with a BSc Hons Financial Management Degree from the London School of Business and Finance (LSBF) will make you eligible for employment options within larger business firms associated with the finance industry, where you can take up different titles including financial advisor or business consultant.
Besides gaining awareness about the latest wealth management trends, studying financial management courses in the UK will enable you to become proficient at rebalancing your clients’ financial portfolios, in addition to analysing and planning financial projections during unforeseen events. Download the application form today and venture into the ways that wealth managers think, operate and invest!
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