‘Tech and touch’: The future of asset management


The changing nature of customer expectations and how balancing technology with bespoke face-to-face advice will separate the good advisers from the best ones.

Like a lot of industries, asset management is facing huge changes thanks to technology — and some companies seem to be taking the (usually unwise) course of simply trying to ignore technology and hope it goes away.

But the changes coming to asset management are not simply a case of people ‘losing jobs to robots’, according to a new PriceWaterhouseCoopers report.

Instead, customer expectations are changing, and savvy asset managers need to find a perfect balance between ‘tech’ and ‘touch’, delivering a streamlined experience to clients (but still with a personal relationship underpinning it).

The PwC report found that interviewees working in the business believed that asset and wealth management was the third most-likely area of finance to be disrupted by technology.

Asset and wealth management came third after customer banking and fund transfers and payments (two sectors which are already seeing wide-ranging changes thanks to hi-tech startups and technologies such as apps).

Most asset and wealth managers believe the main impact of fintech will be the need to adapt to changing customer needs. Some signs suggest that the sector could be slow to respond.

Only 45% of asset and wealth managers agree that they place Fintech at the heart of their strategy, according to interviews with 500 executives in financial services and fintech.

But that actually spells opportunity for tech-minded firms, who’re ready to offer a new experience to clients, says Michael Ranieri of PwC.

Ranieri says: ‘Clients don’t want incremental improvement, they want a different experience.’

‘It’s more than just technology, it’s the digital experience, the high-tech, high-touch way. It’s not just about features, functions and tools. It’s technology with the right amount of personal relationship.’

Software such as focus:wealth is built to provide this sort of digital experience to clients — but still keep the wealth manager or adviser very much to the fore. The software is built to offer a high standard of client experience, keeping the adviser ‘in the loop’ via capabilities such as co-browsing.

The rise of fintech shows no sign of slowing. A report by Accenture found that investment in fintech rose 18% last year alone.

Another PwC report found that global investment in the financial services sector rose above $31 billion (£24.6 billion) in 2017. The report found that 60% of asset managers feared losing business to new fintech companies.

But some companies are reluctant to engage, with just 31% of asset managers engaging with fintech companies, and just 34% offering an app.

A report in Investment Week suggested that the new climate may still be feeling the lingering effects of the financial crisis. Patrick Schueffel, professor at the Institute of Finance of Fribour said that in the wake of the crisis, ‘People started asking more fundamental questions about the role of financial intermediaries in general.’

But that doesn’t mean that asset managers will be cut out of the picture.

A Deloitte report highlighted the fact that a new generation of investors have different expectations — and actually want to work more closely with asset managers, with more information at their fingertips.

The Deloitte report suggests, ‘The new generation of investors desires more proximity with asset managers, a better ability to compare their investments with peer groups, to invest in a more socially responsible way, and they are willing to use online investment platforms.’