A new report by Ernst & Young highlights the top trends the global wealth and asset management industry should consider in 2024, finding that more organizations will need to build tailored strategies for sustainable future growth.
Among the leading resolutions include:
Involving investors
As clients expect more holistic and tailored offerings that adapt to their needs, firms are working to become more client-centric, according to the report. This includes broadening service capabilities to include managing clients’ investments, banking, healthcare, and household needs.
Among the services they could provide include re-evaluating client personas and segments (such as female investors) to better customize and scale delivery, partner with tax, trust, estate and healthcare organizations to provide non-traditional services, and involve investors in co-developing services.
Increasing engagement and inclusion
As an array of diverse clients enter the wealth management space, EY understands that this can offer significant growth potential for wealth managers but will also bring a different level of personalized needs.
As a result, wealth and asset managers are offering products that were traditionally limited to wealth clients to mass affluent and retail investors, such as providing access to alternative asset classes and direct indexing capabilities.
Companies are also adding tools and platforms to enhance financial education around complex products, along with evaluating the value in offering blockchain.
Enhancing talent
EY notes the importance of reskilling and upskilling both new and existing talent, in order to keep up with changes in client demands, technology, regulation, industry practices, and products.
Additionally, EY expects wealth managers to recruit talent in emerging and growing areas like artificial intelligence and private credit.
Optimizing AI
Artificial intelligence (AI) rapidly grew in 2022 and 2023, thanks to the enhancement of API platforms like ChatGPT.
The popularity and efficiency in AI features will only continue to grow in 2024, EY predicts. Specifically, wealth and asset managers will need to understand and embrace AI technologies in order to meet investor expectations, while taking care of how it is utilized.
“The need for efficiency, value and results means that cost optimization and targeted implementation are vital,” EY writes. “It’s also evident that robust governance and the ethical use of AI are indispensable.”
In approaching the technology, wealth managers will need to train and scale internal staff on AI and Gen AI, ensure transparent and ethical approaches with consistent cyber controls and testing, and optimize the technology by transforming “middle-office operations, improve asset valuations, strengthen internal next-best-action frameworks, generate code, enhance investment research and automate workflows.”
Additional insights on the leading asset and wealth management trends from EY can be found here.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
