Expert: Ian Woodhouse, Multrees Facilitator: Rupert Phelps
Headlines:
- £5.5 trillion is to be transferred by 2050 which represents both key challenges and opportunities
- Innovation and regulation drives engagement, from products to more outcome driven solutions and value-added services
- A balance is needed between growth, return, and risk through increasing client personalization, proximity and perceived value
- Segmentation vs. personas is evolving which involves tailoring services to diverse and changing client needs
Discussion points:
Current industry challenges and opportunities
The critical challenges, including cyclical market volatility, inflation, and geopolitical instability were highlighted, also emphasised the need respond to multiple medium term structural impacts, including the largest U.K. wealth transfer in history, projecting £5.5 trillion to be transferred by 2050 (Source: M and G) This has raised concerns among 63% of advisers about losing business due to generational shifts (Source: Schroders).
Innovation and client engagement
The discussion centred on how to evolve intergenerational client engagement strategies, transitioning from traditional product-focused models to more outcomes driven solutions, advice, and value-added services. Innovations highlighted included:
- Enhanced client proximity through personalized services and perceived value
- Growing focus on sustainability and impact investing
- Increased use of digital, AI interaction tools and data supporting advisors to strengthen client relationships
Growth strategies and implementation
Some key strategies for success in the wealth management industry were outlined as:
- Identifying key industry trend impacts and effectively managing change including considering options such as working more with traditional and new partners, like outsourcers, fin tech providers, private equity firms
- Prioritising opportunities for innovation to align with client needs
- Strengthening governance both internally and with expanding partnerships to enhance client service
Segmentation and client personas
Delegates debated the effectiveness of traditional client segmentation versus using client personas and journeys. The consensus leaned toward the importance of better understanding the evolving needs of different client types such as UHNW families, entrepreneurs, affluent etc and their different journeys to better tailor offerings to meet diverse needs of both traditional and newer next gen clients.
Private equity investment in wealth management
The discussion concluded with an exploration of private equity's growing role in wealth management. While some delegates viewed private equity as a driver of growth and efficiency through consolidation and investment others raised concerns about its focus on profitability potentially conflicting with long-term client interests.
Key takeaways:
- Firms need better strategies to retain next-generation clients as £5.5 trillion changes hands by 2050
- Transitioning from products to more personalised outcome based solutions is increasingly critical for enhancing traditional and new clients perceived value
- A deeper understanding of client personas and journeys is needed to improve service delivery for diverse, intergenerational client needs
- Success hinges on balancing growth, return, and risk while maintaining and enhancing client proximity and personalisation to enhance perceived value
- Effectively managing change could also include working more with more traditional and new partners, like outsourcers, fin tech providers and private equity firms
- While private equity investment can enhance operational efficiency, firms must navigate and balance the potential trade-offs with client interests
