InvestorDaily

The majority of wealth managers believe delivering more customised services to clients is essential to stay competitive, but a third are unable to deliver personalisation to the degree that they wish, according to a new survey. The Next-Generation Wealth Managers: Advancing Services and Personalisation with Technology report from Forbes insights and banking software company Temenos found that almost seven in 10 wealth managers believe that a virtual platform is essential to enhance the client experience compared to only 25 per cent three years ago. Nearly two-thirds of wealth managers (64 per cent) are segmenting their clients and creating detailed and distinct profiles, while around a third (32 per cent) are unable to match demand for personalisation in line with high-net-worth individuals’ (HNWI) expectations.

The report lists three pathways that will define the next generation of wealth managers: customer experience enhanced by digital services and personalisation, insight from artificial intelligence and analytics, and new markets defined by mass affluent and alternative investments as well as operational efficiencies. Pierre Bouquieaux, product director of wealth at Temenos, said delivering personalised customer experiences will become the key differentiator for wealth managers. “Both HNWIs and mass-affluent investors want to enhance their relationships with wealth managers through more personalised services,” Mr Bouquieaux said.

The rest of this article can be found at investordaily.com.au.

InvestorDaily

ANZ Wealth has announced a collaboration with the University of Technology Sydney’s Advanced Analytics Institute (AAI) to explore the applications of artificial intelligence in insurance underwriting. ANZ and UTS will work together to understand the ways artificial intelligence can improve the client experience, according to a statement by UTS’ AAI. “This collaboration combines the expertise of UTS and ANZ to explore how big data, client behaviour modelling, text mining and natural language programming, along with social and predictive analytics all can add value in the insurance sector,” UTS AAI associate professor Guandong Xu said.

“An intelligent underwriting model will harness machine learning to provide opportunity for insurers to develop more efficient and reliable assessment processes,” said Mr Xu. ANZ Wealth chief underwriter Peter Tilocca added that AI applications have the potential to provide clients with a higher standard of service. “A data-driven model provides the opportunity to create a more personalised, efficient service with improved quality assurance for our customers when they apply for insurance,” he said.

The rest of this article can be found at investordaily.com.au.

InvestorDaily

Former AWU national secretary Paul Howes has climbed up the ranks at KPMG to head up wealth management. Paul Howes, who previously headed up superannuation at KPMG, will now cover the full range of asset management and investment portfolio. Mr Howes will now oversee KPMG’s firm-wide services in wealth management including super, funds management, private equity and retirement products.

He will replace John Teer, who will shortly take up a new appointment as chief operating officer for KPMG’s Asia-Pacific region. Mr Howes said, “The Australian wealth management industry is continuing to undergo significant transformation and growth, with our national superannuation savings pool now exceeding $2.3 trillion. “I believe we are entering a new era in wealth management. The economic outlook is still positive, the sector is growing and while regulatory change and compliance remains an ongoing issue, the industry’s focus will shift to consolidation and innovation.

The rest of this article can be found at investordaily.com.au.

Last week we were catching up with a client working for one of the regions most prominent wealth management firms, and we discussed how digital disruption could be a huge game-changer for the industry over the next decade.

The strategic use of technology could be the future of wealth management.

Michael Cunningham

We are seeing an immense shift of wealth from baby boomers to the younger millennials, the effect of which is a transformation of the industry regarding increased efficiency and the inherent need for adaption by established firms. Now more than ever, the retention of loyal customers must balance with clients demanding greater choice.

A recent survey by Forbes has shown that by 2020 over half of all investable assets in the US will be controlled by those aged 16-50. Furthermore, a huge $1 trillion each year passes down to younger generations. In other words, investors under 50 are becoming more valuable to wealth and relationship managers.

So, what does this really mean for the future of wealth management?

The financial services industry is fast becoming one of the most digitised in today’s world. Over 60% of all retail banking transactions occurs online. The lesson to be taken from all this is channel diversification.

Traditionally, high net worth clients have been seen as desiring personal contact regarding their asset portfolio, but this may no longer be the case. In Europe, forty-seven per cent of ultra-high net worth clients are on Facebook. Additionally, forty per cent of high net worth clients under 50 believe that social media is an important platform with which to interact with their bank. So it seems important and logical for wealth managers to utilise the power of online channels and social networks. In fact, a 2012 Forrester study showed that client-advisor relations via digital channels actually correlated to higher fees earned.

The lesson here is not that wealth management must wholeheartedly embrace digital channels and ignore traditional methods of communication. But it does appear that stronger client relationships, enhanced risk management and lower operating costs are achievable via the capitalisation of digital channels.

Digital technology can help clients not only connect to their peers but also multiple sources of advice and multiple accounts. What this means for wealth managers is in fact distinctly higher levels of investment activity. The key ingredients for stronger customer analytics, and crucially, future growth could lie in embracing the digital world.

By embracing younger high net worth clients, and their desire for varied methods of communication, wealth managers could identify client needs earlier via online interactions. Furthermore, digital channels are an excellent way to connect early on with high net worth clients’ children by offering direct access to specialists.

Digital technologies have the propensity to answer unmet needs and ultimately provide clients with a superior experience, whilst simultaneously capitalising on evolving market prospects.

To learn how digital disruption in wealth management may affect your career, please reach out to our recruitment team for a coffee.

Michael Cunningham is a Partner at Anton Murray Consulting, working from the Sydney Office. 

Anton Murray Consulting is specialist recruitment consulting firm focused on providing high calibre banking professionals to clients primarily within the Investment Banking, Funds Management and Wealth Management sectors. Headquartered in Sydney, Australia we work on a diverse range of assignments across the Asia-Pacific region across our four primary locations of Sydney, Singapore, Hong Kong and Melbourne. 

Deal Street Asia

Australia’s second-biggest pension fund is expanding its private-equity team as it plans to boost returns at a time of high valuations in stocks and low bond yields. MLC Ltd., which oversees more than A$70 billion ($54 billion) in pension assets, is looking to hire two PE fund managers who will be based outside Australia and will scout for investment opportunities, according to Chief Investment Officer Jonathan Armitage. This comes after David Seebold, who was previously in the Sydney PE team, was posted to New York as MLC looks to spend a cash pile that’s at the highest level since the financial crisis in some of its portfolios, Armitage said.

Armitage is scouring the globe for options on where to spend his next dollar as Australia’s pension pool, the world’s third largest, is forecast to grow to A$4 trillion within the next decade. With yields below zero on more than $10 trillion worth of bonds and global equity valuations close to all-time highs, MLC expects to increase its investments in private equity and other alternative assets in the next two years. “Returns from the private equity part of the portfolio continue to be very robust,” Sydney-based Armitage said in an interview Friday. “We’ve got what I would describe as a pretty healthy pipeline of potential investment opportunities.”

The rest of this article can be found at www.dealstreetasia.com.

Will Hamilton, The Australian

Events such as Hazelwood prompt us to look more broadly at investment issues in the area of ESG or environment, social and governance. ESG factors have now come into the mainstream of investment decisions and are incorporated into analysis towards achieving risk reduction and protecting shareholders. In short they are now significantly affecting the value of a company.

The United Nations Principles of Responsible Investment (UNPRI) “recognises that the generation of long-term sustainable returns is dependent on stable, well-functioning and well governed social, environmental and economic systems”. I should point out that while the UNPRI is both voluntary and aspirational it has been developed with some of the leading investment managers, and provides a framework for integrating ESG into investment-making decisions.

The rest of this article can be found at www.theaustralian.com.au.