The WEALTHTECH Book

Wealth Management – Preparing for a Digital Revolution

By Stephen Ong

Founding Partner, The Hub Exchange

Wealth management is the latest financial industry to face the opportunities and challenges of technological disruption. Dramatic headlines such as “Traditional wealth management is gone” point to the transformation of a historically opaque industry. The digital revolution is driving incumbents to decipher how the industry will be transformed and how traditional wealth management needs to adapt to be able to thrive in this rapidly evolving world.

The two most fundamental forces driving change are the shift in client behaviours and the evolution of technology. These forces complement each other in their pace of change and are often intertwined, having impacts on each other.

Changing Client Behaviours

The rising affluence of millennials is a key focus for the future success of the wealth management industry. These millennials have entered the work force and are now beginning to accrue wealth. It has been estimated that they will also inherit $30 trillion via generational transfer in the decades ahead.

For wealth management firms to remain relevant, incumbents face the challenge of continuing to service their existing clients, while having to adapt to new client behaviours and strategically positioning themselves to engage the next generation. There is a common misconception that millennials respond almost exclusively to social media and digital tools as methods of engagement. ...