Insights from the Wealth Technology Panel at HL Global Tech Conference 2024

For this week’s blog, I thought I would reflect on my participation on a wealth management and technology panel I was part of at a recent event sponsored by Houlihan Lokey as part of their global technology meet, greet and learn day in London.

There were different perspectives sitting across the panel in terms of focus and operating model so of course there was a diverse range of opinions supported by different experience, but a couple of things were quite clear for this week’s output.

First, there was a “not surprising” consensus among all of us that the proper use and engagement with technologies that can address operational inefficiencies for the business is of the key requirements for an advisory and wealth business to build scale. Further, there was a similar consensus view that the evolutionary path that AI is taking in connection with relationship management technology opened up the real possibility that technology with the right “voice” for enhanced holistic engagement would become a reality sooner than expected.? ?

The panel was also strongly aligned around the fact that the right sort of solution designs that focused on the “whole life picture” also would also make it much easier to develop a full perspective of a client’s situation, which in turn would significantly improve building trust, and ensuring that consumer duty of care was persistent and consistent in the entire planning, advisory and investment processes. ?Empowering this approach for a trained advisor/planner would not only reduce churn but improve the opportunity for a broader asset and liability conversation, and a more clear path to developing a household relationship to support various stage of inter-generational wealth activity.

Finally, without doubt, the panel was aligned on the view that a user experience built around simplicity, combined with reduced multi-layered human intervention, and easily executed integration were the 3 attributes of software solutions that led to higher end user satisfaction and engagement. While firms were increasingly more interested in working only with vendors who could directly, through time, take charge of the entire e2e value chain across the front, middle, and back as perhaps the most likely way to acquire these attributes, it was also quite clear that since many advice firms often scaled, both through acquisition and specific types of channel referral partners that any software supplier of this nature, would often need to be prepared to achieve results within a more “messy environment” in a limited way at first in order to start the journey toward achieving the straight through processing objectives that senior leadership were craving for.? This meant adopting a multiple year lens of course was essential, even when the opportunities initially presented were of limited scope and reach.

Firms like my own, Objectway, do present the opportunity to work with a firm that is flexible enough and forward thinking in its value chain integration approach to operate as the catalyst for this particular journey, although what was clearly evident from the discussion was that first, wealth and advisory firms, as operators in a world that depends heavily on the maintenance of trust, human engagement, and reputation, are very often highly risk adverse and equally suspicious of technologies that seek to deliver efficiency through a combination of automation, and intelligent programmable integration.? Many wrongly fear that this exposes firms to unknown remediation scenarios of greater danger, even while it helps the firm to reduce its administrative functions, and the burdensome task loads that advisors and investment managers dread. This type of pre-judgement and suspicious behaviour clearly leads to a more lengthy buying process than would seem necessary. ?

Second, it was clear that inconsistent user engagement, when it came to technologies designed to simplify process, and increase automation and BAU usage across a client bank became the chief reason that senior leadership were frustrated, and not seeing the results they hoped quick enough emerge. ?The panel conclusion was that addressing this issue required a degree of collaboration on change management, policy enforcement, and reiterative training that generally was lacking, both from an internal ownership perspective as well as from technology partners.?? To be more specific, it was clear that internal stakeholders need to develop better operational procedures to not only enforce and incentivize change, but also required, very early on, the analytics, and reporting to identify weak engagement, and trouble spots in the experience, and deal with them. The ability to do this was something that the business leaders believed should be a core functional capability of a SAAS provider, alongside the presence of knowledge resources in both human and machine form that could support and intervene promptly to enhance confidence, trust, and understanding of the value proposition delivered to the person and business through technology.?? Without this level and variation of commitment, technology providers were unlikely to acquire the long-term contract commitments they crave in order to underpin continuous improvement and r&d programs.

Finally, and in conclusion, it was reiterated a number of times that for the foreseeable future, a successful wealth and advisory business would be a “human led one”, but that the promising start that was being seen through “co-pilot” and “virtual assistant” solution designs, as well as from hyper automation techniques could well bring the possibility of real scale without “compromise” that many of the most ambitious in the industry crave, and why of late, banking and neobanking organizations with huge client banks (in comparison to any in the wealth industry) have started to showed, even with tougher regulation, a renewed interest and excitement toward giving advice.? The consensus was that since many firms did not possess the IT skills in-house, unlike banks to take on the task of introducing “turbo charging” capabilities into the advice process, that this would probably represent the best place for technology firms to deliver a high return on investment and sustainable growth.? ?This closing message was clearly one that I and the other “software solution” providers on the panel were glad to here from the business owners, and certainly should continue to underpin investment from venture and private equity alike present in the audience into this valuable, large and diversified market segment.

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