The wealth management sector has seen a paradigm shift in recent years, primarily due to demographic shifts, an upsurge of millennials into the market, and accelerated digitalization. The stock market continued to increase to new highs, attracting lots of new investors. De-mat account openings reached a new high of 14.2 million in FY 2021, proving this fact.

COVID-19 disrupted everything, and although the world strives to find a new normal, the pandemic’s impacts are still influencing the way wealth managers do business. The year 2021 was a year of transformation, due to the COVID-19 pandemic and its consequences.

As we slowly recover from the pandemic, financial services firms have realized the importance of virtual engagement to business resilience. Wealth management organizations will need capabilities to cater to and provide services to new-age customers. Today’s investors are sufficiently informed, have access to expert knowledge and tools, and are proactive in their financial planning.

Traditional business models must be adapted to match today’s customer demands, and product and service offerings must be augmented through the use of smarter technological platforms. New obstacles will emerge in 2022 and beyond, but there will be prospects for those who change and adapt.

Regulatory Oversight

The regulator has always been concerned about treating customers fairly. However, as several of the new financial products, ranging from digital gold to cryptocurrency entering the industry, policy is increasingly adopting this intent. For wealth managers, this means higher compliance expenses since they must scrutinize the products they offer to their customers much more closely. This involves conducting due diligence.

Effortless Advisory Platforms

Investors have been exposed to the world of technology thanks to the surge of smartphones and internet penetration. Investors are increasingly shifting toward platforms with uncomplicated and simple user interfaces that allow them to make investments with the touch of a finger.

Digital wealth management is more than just providing digital channels for transacting; it also includes leveraging technology to provide higher value, excellent services, and an improved investment experience for customers.

These easy to use and user-friendly platforms have made the entire investment process accessible and inexpensive to a broad segment of the population. With innovative ways to connect with new clients, handle client relationships, and control risks, big data and advanced analytics are reshaping the sector.

Goal-Based Financial Planning

Investors are becoming completely conscious of milestone-based planning and need to plan and invest for them. These goals could be short-term or long-term. Wealth managers must reconsider their wealth management approaches beyond wealth maximization and provide financial planning solutions that address these objectives. Concerns about longevity are increasingly or should be at the forefront of client advisor engagements.

Wrapping Up

COVID-19’s prolonged presence will continue to have a substantial impact on wealth management business. As the wealth management industry becomes more competitive, it is more important than ever to respond quickly and efficiently. With the advent of new technology, it is now feasible to accomplish more in less time and with fewer resources. It’s time for the wealth management business to look ahead and respond to the rapidly evolving market environment.