For years, experts have predicted significant disruption for wealth management firms and financial services organizations. However, with the rapid rise of fintech solutions and the rapid shift to remote work, those timelines that felt somewhat far off are now rapidly accelerating. For many firms, digital transformation has already happened, and the challenge is optimizing the technology investments critical to that transformation so that these firms can continue to stay ahead of the curve.
However, digital optimization is only one factor that will drive growth in 2022. Here are four trends driving growth in wealth management in 2022 and how your firm can use them to its advantage.
The Top Drivers of Growth in 2022
In the Wealth and Asset Management 2022: The Path to Digital Leadership report, more than 1,500 leaders in the financial services industry shared what the future will bring for their sectors and where firms can look for growth. Based on their feedback, there are four key points wealth management leaders will need to understand to stay ahead of the competition in 2022 and create a solid foundation to build on for the future.
Digitally Enabled Client Onboarding
Digital onboarding will become a critical piece of digital transformation for financial advisory firms. In fact, 69% of investment providers will offer digitally enabled account onboarding by the end of this year.
What does this look like for your organization? First, it means reframing your onboarding process to be more client-centric, streamlined, and most importantly, integrated. Many firms are already using digital tools to manage paperwork, automate processes, and reduce errors. However, others are still looking to adopt an onboarding process that is faster, easier and more integrated into their current systems.
Companies focused on digitization say they have 39% of their revenue through digital channels and expect that percentage to rise to 59% in 2022.
AI-powered Tools to Support Clients and Employees
The Great Resignation is continuing to rock organizations across many industries and verticals. While leading firms will be looking for a technological edge that can help them attract new clients, they also need to look inward at ways to attract and retain top talent.
AI-powered technology can reduce repetitive tasks and help free up time for financial planners and the teams that support them. By reducing these tasks, financial planners and their teams can focus on activities that drive growth for their firms and value for their clients. It pays off. Companies focused on digital transformation on the front and back end saw an 8.6% increase in revenue, an 11.3% jump in productivity and a 6.3% improvement in market share from their additional technological initiatives.
Emerging Fintech (Including Blockchain) Will Lead the Way
Omnichannel, digital customer experience, personalized recommendations — these are common industry buzzwords. And 2022 is the year they’ll no longer be a competitive advantage but will become a must have for wealth management firms looking to grow.
Firms will need to find fintech partners that support their end-to-end business—from onboarding to asset expansion. While some firms will build tools in-house to meet their needs, the majority of advisors will evaluate third-party providers that meet their needs and integrate seamlessly into their current workflows.
But new workflows will need to be established to support emerging technologies. Blockchain and crypto are continuing to gain traction and could open up a new pool of potential clients. The average cryptocurrency trader is under 40 (mean age is 38) and does not have a college degree (55 percent). Over one-third (35 percent) have household incomes under $60k annually. Plus, 13% of Americans invested in crypto last year; that number will only grow in 2022.
Cybersecurity and Compliance Come First
Security continues to dominate the news, and investors will want to feel comfortable that their assets are protected. To be secure, wealth management firms must focus on building out the right security architecture, training their staff to be cyber smart, and leveraging tools that will help deter hackers.
As you evaluate tools to manage digital transformation, ensure you find one that will help you manage current and future regulatory requirements. Experts predict there will continue to be more global regulation around conduct and control, risk management, fintech, anti-corruption, and cybersecurity.
Docupace Can Help Drive Growth
2022 will be a big year for digital-first wealth management firms. Ensure you are not left behind by getting the right tools in place to build a better experience for your clients and advisors.
Docupace has the tools needed to meet 2022’s trends, including digital customer onboarding, automated solutions for your employees, and built-in compliance. With Docupace added to your digital tech stack, your firm will be able to grow productivity and profitability.
David Knoch is CEO of Docupace a solutions provider focused on digitizing and automating operations in the financial advice and investment industry. David currently serves as the Immediate Past Chair of the Financial Services Institute (FSI) Board of Directors and has been voted one of the 25 most influential people in the Investment Advisory industry two years in a row – 2018 and 2019.
