Wealth Management: Emerging Trends in a Dynamic Environment
Another major shift is investors moving from 'Do -it -Yourself' mode to 'Need Advice' mode. Investors are now looking for constant collaboration with the advisors - continuous advice across different product types, unique product bundling suggestions, trends in the local and global markets, and suggestions on investment protection mechanisms. Customers are now looking for transparency and asking questions about the exact nature of investments. Clearly, the strategy of simply pushing products to the affluent or high net-worth investors is not going to work in the long run.
Today, banks are sparing no effort to strategically transform their product offerings and services, while revamping their technology infrastructure to differentiate themselves from the competition. However, insurance firms, brokerage service firms and retail banks are also investing heavily on the advisor centric model and each one is trying to be the chosen wealth manager for various customer segments. Without insight on customers' needs in existing and growth markets, firms will find it difficult to develop an attractive proposition. As a result, banks are moving away from the conventional pure product focus and focusing on total solutions that are completely oriented to client needs.
Banks have also realised that product range and features are key differentiators in today's fiercely competitive and largely unpredictable market. The manufacture of products is not every bank's cup of tea and the 'gap' in product offering is catered to by distributing products originating from other issuers. While manufacturing products is definitely the way forward, distribution income continues to be a key revenue stream. Herein the benefits of innovation, in terms of product bundling and utilisation of customers' 'sleeping assets', get highlighted. Loan products bundled with insurance, margin lending, self funding instalments to gain geared share exposure, and bundling of banking and investment products are some interesting products on showcase.
Ultimately, the greatest success will be realised by those banks that comprehensively understand their clients. Only then will they be able to leverage the existing strengths, and transform and adapt their service delivery and technology to cater effectively to client needs in their target growth markets.
I have authored a detailed paper on Wealth Management: Emerging Trends in a Dynamic Environment. You can access the same here. Please do leave your comments and thoughts.
