The wealth management industry as we know it today is steadily being reshaped in ways that demand greater efficiency and revised ways of doing business.

A new type of client is emerging with robotic and digitised platforms. Concurrently,  the plethora of new regulations posing stricter protocols are moulding and changing the rules of the game.

As the future unfolds and a new breed of client emerges, it is important for wealth managers to stay ahead of the game, remain competitive and invest in a transformation that is built around a technologically-advanced, cutting-edge and refreshed core banking system. All this must be done with the least disruption to the ways established clients are accustomed with.

People’s schedules have become busier. Wealthy young investors seek more efficient ways of investing their hard-earned or bequeathed wealth. They want to make their own decisions and look for options that allow them to do this both efficiently and effectively. However, they also want to ensure that their decision is the right one, getting a second opinion from a skilled, knowledgeable and experienced wealth manager, who, more often than not, would has years of experience and the backing of a robust  research function.

Therefore, although the digital era is seemingly taking us by storm and changing ways in which clients do business, wealth managers must be aware of new ways of interaction, without invalidating their role or function.

Successful service providers are ones that understand the feelings, approaches and preferences of their clients, and set out to meet them. Yes, digital is set to grow and technology is the way forward for wealth managers in a competitive financial background, but that is not all there is to it. Virtual and digital channels should not be seen as replacing the face-to-face interaction. The two should be seen as reinforcing one another, with face-to-face interaction remaining  the bedrock of the wealth management service.

The investment services landscape is being impacted by other trends, namely:

Stricter regulations – The financial services industry is under constant scrutiny by the relevant authorities, increasing directives around fraud-prevention and anti-money laundering, among others. This has certainly increased pressure on financial services providers, augmenting the time-consuming process involved when advice is given to investors. That said, regulations are in place to safeguard both parties.

Intense competition – In a saturated market, players are looking for new opportunities for growth. Digitalised portfolio management and dedicated platforms are set to gain ground in the future and the future is now.

Digital tools are a factor to be reckoned with. They help drive efficiencies and ease greater investment choices, while supporting portfolio construction discipline and improving client experience. We live in a world where  investors want to engage with investment advice providers on their own terms. Although human advice and intuition are hard to replace, service providers that fail to align with the newest technologies and develop digital advice capabilities will lag behind.

Aldo Scardino is responsible for the wealth management function at Bank of Valletta.

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