Innovation in Wealth Management Sector 2021
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The wealth management sector continues to undergo a digital transformation driven by a variety of technology innovations. Smaller and more nimble organizations in the industry leverage automation to improve efficiency; attracting notice from their larger competitors. AI and machine learning are also making an impact; helping companies provide better customer service to their clients.

In the end, technology is revolutionizing the front office of many wealth management businesses. As such, opportunities abound for tech providers with experience in banking and financial services. If your IT company has clients in this industry, understanding this transformational impact helps your team gain more business.

Creating a Future Proof Front Office

As wealth management companies embrace the digital transformation of FinTech, obviously their front office also needs to adapt. The forward-looking firms in this space increasingly adopt a hybrid model for providing advice to their clients. This approach involves leveraging machine learning models to enhance the advice typically shared by human investment analysts.

These companies also use AI and machine learning to determine front office operational areas ripe for optimization. In addition to improving efficiency, AI technology also provides insights related to the company’s front office workforce. This helps firms analyze whether current employees need upskilled in the new tools used for offering client hybrid advice.

The Increasing Use of Hybrid Advice in Wealth Management

As noted earlier, client management is one front office function seeing a large impact from technology, especially AI and machine learning. Research studies note that customers prefer receiving advice from a digital tool with additional input from an investment professional. This model ranked higher compared to getting only digital or traditional human advice.

Notably, this digital transformation is not replacing the traditional investment advisor. In fact, machine learning bots sharing the work lets human advisors focus on more valuable tasks. These include goals planning and customer relationship building. Advisors also gain the opportunity to move into other areas like tax and retirement planning.

Expect Wealth Management Pricing Models to Also Change

An increased reliance on AI-powered tools for investment advice means wealth management pricing models are likely to change. Expect investors to benefit from simplified costs for using standardized investment services. At the same time, the era of the commission-based investment advisor is likely over. These financial professionals are expected to receive annual salaries as a replacement.

Looking For IT Talent?

If your company needs technology talent to meet the changing needs in finance, connect with The CERES Group. As one of the top IT staffing agencies in Boston, we provide great candidates to help your organization’s success. Schedule a meeting with us at your earliest convenience.


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