The Top 5 Wealth Management Research Reports (Your 2022 Summer Reading List)
June 29, 2022
The Top 5 Wealth Management Research Reports (Your 2022 Summer Reading List)
(Updated: July 2022)
Canada’s workforce is in the midst of a much-needed and well-deserved vacation season - and nothing says vacation like a good read with serene scenery.
Since advisors lean heavily on market trends and data that can help them guide their clients and their investments, they need access to reliable research reports. And with so many to choose from and so little time for relaxing they have to focus on the reports that will give them the most value. We have selected and summarized the key points of each one of these reports so you don't have to. Read on to learn more about the state of the wealth management industry in 2022.
Wealth and Asset Management 4.0
With the survey results coming from 500 investment providers and 2,325 investors across three regions and 15 countries, this report reveals six mega-trends that will shape the course of the industry in 2022: (1) a shift to digital interaction, (2) a growing desire to invest with purpose, (3) a wider demand for democratized products and services, (4) a requirement for higher integrity and standards, (5) an expectation for lower fees and pricing transparency, and (6) a greater willingness to switch providers if their needs are unmet.
As financial service firms adopt new technologies, they see sharp improvements across different key performance indicators. “Digital innovation boosts productivity and AUM, which translates into higher revenue and market share, and eventually greater shareholder value.”
In the next two years, expect a growing impact of ESG products and services in the industry. It is reported that 34% of investors are going to be seeking advice around ESG investing.
It’s a myth that millennials want to do everything digitally. In fact, 34% of millennials are meeting with wealth providers in person and 46%, nearly half, will prefer to meet face-to-face in the future.
According to the report, the best way to build relationships with investors is to act in their best interest, be available when needed and stay in touch during market disruptions.
Optimizing the Wealth Consumer Engagement Journey
As clients’ digital experiences are drastically evolving, new standards are established requiring a higher level of relevance, personalization and engagement. This report explores how wealth managers can meet these standards and use them to improve the relationships they have with their clients. Deloitte maps the customer journey in 4 steps, beginning with Entice, Buy, Serve, and ending with Engage.
Nearly half of investors in the survey said that acting in their best interest was the best way to build a relationship and be there for them. This is critical, especially during current market disruptions (and this came up in the previous report!).
“As digital expectations continue to grow, prospective clients are expecting the same experience from advisors that they receive from adjacent tech providers […] Nuanced processes can be automated (e.g., computerized data collection), which allows advisors to focus their efforts on advice rather than manual tasks.”
As part of Capgemini’s expansive catalogue of research across various industries, this annual report focuses on the top trends happening in wealth management. This year's trends included measuring increasing ESG standards when diversifying portfolios, and how to strengthen “client stickiness” by personalizing customer experience services.
Cybersecurity and regulatory compliance are becoming a top priority as companies adopt technology far and wide in the wealth management sector.
It’s critical to prepare for the biggest intergenerational wealth transfer in history - from Baby Boomers all the way to Gen-Z - and it’s up to wealth advisors to bridge the knowledge gap.
As the number of ultra-high-net-worth individuals rises globally, “the need for complex and tailored financial advice is also ramping up”, promising the “bespoke advisory model” of family offices.
Even when firms are accelerating their digital transformation, it’s crucial to maintain human intervention alongside technological efficiencies.
The greatest wealth transfer comes with growing concerns related to ESG. Investment choices are likely to gravitate more towards this sector.
2022 Investment Management Outlook: Positioning for a Greater Impact
With responses from 400 senior investment management executives from North America, Europe, and Asia-Pacific, this report narrowed in on how their organizations have adapted to the varied impacts of the pandemic. Impacts have affected their workforce as well as their investment priorities and anticipated structural changes in the year 2022.
Digital transformation investment has paid off. An overwhelming majority of wealth management firms reported that AI (Artificial Intelligence) helped them generate alpha in the pre-investment phase.
There’s a significant regional difference in the implementation of digital transformation and modernization of governance mechanisms. Overall, European firms are leading in terms of modernization, followed by the Asia Pacific, and then North America.
The workplace talent model will continue to shift in 2022, and agility in talent management is critical to maximize benefits and deliver optimal results.
2022 Long-Term Capital Market Assumptions: Time Tested Projections to Build Stronger Portfolios
JP Morgan Asset Management
This is the 26th year of the J.P. Morgan Asset Management’s Long-Term Capital Market Assumptions publication. Reporting on capital market estimates for hundreds of asset classes and 17 base currencies, investors and advisors rely on its information to inform portfolios and asset locations.
Two years after the pandemic, economic scars are fading as recovery gathers global momentum; however, policy choices will leave an enduring impact.
ESG investing is a global trend “driven by investors trying to increase risk-adjusted returns (‘doing well’) and support sustainable outcomes (‘doing good’).”
According to the report, it is a risk for investors to ignore emerging markets, like China, when diversifying their portfolios. Despite the lack of exposure to Chinese assets, long-term investors should dig deeper into this investing category as it has the potential to offer a return premium compared to the developed market.
With the development of digital customer experience, the wealth management industry needs to rapidly catch up in order to attract and retain clients. This article showcases the benefits of deploying advanced analytics as well as some guidelines when it comes to digital transformation.
The one-size-fits-all service model is no longer suitable now that clients are more familiar with needs-based personalization and customization.
Data shows that relationship managers spend 60-70% of their time on non-advisory activities, aka “non-revenue-generating activities.” This is costly, also time-consuming and needs to change as clients ask for more engagement and additional options for remote service.
The three areas that will benefit greatly from data and analytics are 1) acquisition and onboarding, 2) engagement and deepening of client relationships, and 3) servicing and retention.
There are a ton of expert resources available for wealth professionals. With recession on everyone’s mind, it’s no surprise that many reports are focused on making wealth managers even more effective with technology. As a result, this year’s research reports may be even more valuable to help advisors make sense of recent market trends that are anything but status quo. Yet, not every report will speak to every advisor. Choose reading that’s most valuable to you, in your limited time off. We highly recommend printing out any reports just this once (use recycled paper!), so you can be screen-free on your summer vacation, after too many Zoom calls. Happy reading, and from our team to yours - enjoy your vacation season!