Top wealth management trends for 2019

February 25, 2019 by Moriah Diedrich

about the author:

Moriah Diedrich

Demand generation specialist

Moriah Diedrich is a demand generation specialist at Advicent, the financial planning technology provider of choice for nearly 100,000 financial professionals.

As the turmoil of 2018’s final quarter suggested, 2019 may mark the end of a long-running bull market and require wealth management firms to juggle market changes and the task of fortifying their businesses for the future. As firms revamp business models and technology stacks, success will largely depend on making quick adjustments for emerging market trends and, most importantly, meeting customer demands.

Drawing from the Capgemini Top-10 Trends in Wealth Management study and the Aite Group Top 10 Trends in Wealth Management, 2019 report, here are four wealth management trends that will have important implications for investors and advisors in 2019.

Evolving needs call for agile distribution models

Emerging demographic segments in the high-net-worth (HNW) market have shown a different set of preferences when it comes to wealth management services. These are driving firms to shift from a product-oriented mindset to place a higher priority on customer service and client experience. Firms that are willing to redesign their distribution models to be more agile and better catered to evolving consumer preferences will be in an advantageous position to secure these emerging client sets.

Thankfully, FinTech tools are now embracing this new wave of the financial planning practice and are emphasizing an ability to both enhance the client experience and support a wide array of product offerings.

Maximizing ROI by reevaluating technology investments

With this recognized need for an adjustment in advice delivery methods, wealth management firms are beginning reevaluate their technology stacks. Robo-advisor solutions that automate the planning process have gained popularity as of late, but clients still show a strong preference for a balance between this automation and help from a human professional. In fact, 79 percent of Millennial clients still prefer a combination of the two, or advice from a human advisor entirely, over total automation of the planning process.

Considering that HNW clients often require more in-depth, comprehensive planning strategies, they will continue to benefit from the personal touch of a human advisor or wealth manager. Moving forward, we will see firms seek technology that allows them to maintain a strong personal connection with clients, while also providing convenient access to plan information.

Streamlining client onboarding

Onboarding has historically been a slow and painful process in the financial services industry, stemming from a number of reasons. This results in lost time at multiple levels of a firm and can deter HNW clients who demand a quick turn-around and high transparency throughout the process.

Firms willing to leverage technology to provide a more efficient and painless onboarding experience will not only be able to attract more clients, but also retain top advisory talent. Client portal technology is integral to make these improvements with tools such as account aggregation and collaborative fact finders.

Increased importance of retirement planning

According to Northwestern Mutual’s 2018 Planning & Progress study, a shocking 78 percent of Americans are “extremely” or “somewhat” concerned about not having enough set aside for retirement. As the financial planning practice embraces the comprehensive financial planning movement in 2019, retirement planning and decumulation will gain more attention as an important aspect of the financial picture. Financial planning technology is evolving to strengthen an advisors’ ability to fully understand and impact their clients through tools like client portals, account aggregation, and digital advisory platforms.

As the market and customer demands continue to evolve throughout 2019, wealth management firms should evaluate the effectiveness of their current planning technology by its ability to scale and generate positive ROI. Identifying areas for improvement before the market shifts will allow firms to strengthen client relationships and fortify their businesses for the foreseeable future.

To learn more about the consumer and industry trends that have launched the modern financial planning practice into a Third Wave in 2019, click here.

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