Crystal-ball gazing is always a tricky sport. But from our privileged position at the hub of the investment management industry we have a good view of the key issues managers face. So here goes with my predictions for the year ahead:
1) Consumer-led technology takes hold
Slowly I’m seeing the technology we take for granted in our everyday lives creep into the retail financial services space – for example, with the launch of better mobile banking apps, peer-to-peer lending, the emergence of robo-advisors and the like.
The investment management industry has been somewhat behind the curve with this. Take the mobile revolution. As our CTO Todd Gottula pointed out in a recent blog post, so far investment managers have been cautious on adopting mobile technology. However, pressure from clients and employees is now compelling firms to figure out their mobile strategies and policies.
We also expect a further increase in demand for cloud solutions, and are starting to see clients look to us for more collaborative, social solutions that can help you share information more efficiently.
2) Regulation’s grip tightens
The regulatory agenda is really starting to take a hold on the industry. Many of our clients are now preparing for their first AIFMD reporting and filings. Then there’s the question of how to deal with MiFID II, Solvency II, FATCA and a host of local tax regulations …
Understanding what impact these will have on your business and how you can respond as efficiently as possible is vital.
3) “Hybridisation” and outsourcing pick up pace
During 2015 and beyond I expect hedge funds and traditional asset managers to continue to broaden their offerings in an effort to satisfy investors’ appetite for more non-correlated investments. But if you want to gain market share and reduce costs in this competitive landscape, it will make ever more sense to outsource non-core functions wherever possible – including technology and administration.
4) Suitability under the spotlight
The international crackdown on unsuitable advice is not going away. So we expect forward-thinking wealth managers increasingly to adopt sophisticated software tools that allow you to more proactively leverage the data you now need to gather about clients. That will help you more precisely – and efficiently – predict your clients’ needs and objectives, and tailor your offerings to them.
5) Data will be key
Gathering as much data as possible on each client’s profile, objectives and behaviour is at the heart of a future-proof compliance strategy. Many wealth managers are already working on ways to capture the right data and efficiently manipulate and use it downstream, and we expect this trend to continue through 2015.
How you respond to – and, more importantly, get ahead of – these trends will be a key differentiator in your future success.
I’d be interested to hear your thoughts – is there a trend I missed?
Martin Engdal is Market Strategist and Director of Solution Marketing at Advent EMEA. In this role, he has responsibility for strategic positioning of Advent’s solutions in EMEA and for driving Business Development efforts in Europe, Middle East and Africa.