Driving efficiency in wealth management

There’s been a lot of changes within the Wealth Management sector. We explore how digital innovation will impact operational efficiencies, adviser engagement and the overall client experience.

Challenges in Streamlining Operations Post-acquisition

We’re seeing a growing commercial imperative to improve operational efficiency within larger wealth management firms, predominantly due to an increase in acquisitions of smaller firms which are consolidated under one roof.

While each acquisition increases the consolidator’s Assets Under Management, adviser network, and scale; in many cases, the operating model of the acquired business does not significantly change post-acquisition.

As each acquired company continues using their own processes and systems, it becomes increasingly difficult to centralise initiatives that could create overall efficiency for colleagues, improve customer service and drive higher margins. Operating costs for the consolidator, therefore, often increase or at least do not decrease, with each acquisition.

Start with the pointy end of the spear, as the owner of customer onboarding, the adviser impacts how things play out downstream.

Craig Wills, Hi Mum! Said Dad Managing Director

The problem itself is plain to see; exactly what to do about it isn’t as clear.

Our colleagues over at L.E.K., Brownse Cheung and Ashish Khana, have been considering this topic within their recent video “The Next Frontier of Value Creation in Wealth Management.” They explore and suggest solutions for resolving downstream inefficiencies, such as better tools for advisers to use in client meetings.

Building on their thoughts, we wanted to share some tangible ways to resolve these inefficiencies, like unified technology platforms and enhancing data management, so firms can get started on the path to improved service delivery.

We see an incredible amount of unnecessary duplication in the current approach to client onboarding and administration

Current challenges in client onboarding and administration

We see an incredible amount of unnecessary duplication in the current approach to client onboarding and administration, which is, put kindly, avoidable.

A standardised system for inputting client information across the group would ensure consistency of data; offering an opportunity to streamline compliance and importantly, enabling advisers to offer better service.

At Hi Mum! Said Dad, we have designed and developed similar concepts for well-known private banks, lending companies, and one of the UK’s largest wealth advisories. While heralding from different sub-sectors, they all aimed to arm front-office teams with smarter insights and streamlined customer administration.

A streamlined way forward

Thinking about a solution for wealth management administration, it’s easy to imagine a simple tablet app that allows advisers to directly plug in the information they gather during meetings with clients, unifying data input and removing the need for the information to be entered again by admin staff.

In doing so, the solution builds a customer profile. As the customer engages with products and services, this kind of system enables segmentation to become a live and active driver for advisers to improve the quality of their advice without additional admin or planning.

For instance, as individuals move in and out of segment cohorts based on their wealth profile, life stage, circumstances, and outlook - advisers would see the user's status and dynamic suggestions on appropriate products and services This approach would have the added benefit of significantly meeting consumer duty requirements.

Understanding adviser pressures and how to improve their day-to-day will create intrinsic motivation for adherence.

Maximising adviser engagement and adoption

There is merit in starting with the pointy end of the spear, as the owner of customer onboarding and set-up, the adviser greatly impacts how things play out downstream.

There will be many professionals working in the space who can visualise this kind of tool, but just as many will be thinking about the probable barriers; for instance, what if advisers don’t want to use it? What if an existing fragmented tech stack makes integration tricky? No doubt there are many more.

All can be overcome.

Understanding adviser pressures and how to improve their day-to-day will create intrinsic motivation for adherence. Hi Mum! Said Dad major in ethnographic research and behavioural tactics to determine how to design and develop solutions that drive adoption.

Optimising technology Integration

Consolidators have a unique, and often untapped, opportunity like no other player in the field. Having acquired multiple businesses using different third-party and proprietary tools to deliver the same service, they have multiple first-hand test cases to review tools and cherry-pick the best of the best technology across their companies.

To do this effectively, existing workflow journeys need to be mapped out. Hi Mum! has recently completed this exact exercise for one of the leading UK wealth management companies.

We approached the challenge by focusing on the customer's lifecycle stages. For each lifestage, we mapped out the current customer journey, including all interactions with team members, and the tools and systems used along the journey. With that, we were able to identify the pain points and get to work mapping what the ideal journey should be.

This process then allowed us to review the third-party or proprietary tools to gauge the extent to which the tech solutions in place supported the ideal journey. While a relatively simple task, this process was a great enabler, as it gave the collective team confidence to decide which systems to cut, keep or optimise.

The wealth management sector faces a critical need to improve operational efficiencies

How Hi Mum! Said Dad can help

The wealth management sector faces a critical need to improve operational efficiencies, especially in light of ongoing consolidations. The challenge lies in unifying disparate processes and systems post-acquisition to streamline client onboarding and administration.

This may seem daunting, but beginning with client tools and working your way in allows things to be staggered, and therefore more manageable.

Understanding the needs and motivations of advisers is crucial, as providing tools that genuinely help them service their clients better will aid in adoption and enhance overall client satisfaction. Additionally, firms can turn the many disparate systems across the network into an advantage by reviewing each process and system to identify what works best, creating a consolidated and optimised way of doing things.

Hi Mum! Said Dad's approach, which includes ethnographic research and behavioural tactics, helps design solutions that drive adoption and optimise technology integration. This holistic approach positions firms to meet customer demands effectively and improve overall business performance. Embracing these strategies will not only meet regulatory demands but also position wealth management firms for sustainable growth and enhanced client satisfaction.

It might sound big, but it doesn’t have to be. If you’d like to learn more, we’d love to have a chat!

Want to learn more, or turn your ideas into reality?