Once again, Objectway were proud to participate in the annual wealth management industry review hosted by Compeer, a pivotal event that gathers senior executives from the UK’s leading Wealth Management firms. This year’s gathering provided an in-depth exploration of the industry’s current landscape, its challenges, and the opportunities that lie ahead. The insights shared were both revealing and encouraging, painting a picture of resilience, yet also highlighting areas ripe for innovation and improvement.

A Resilient Industry with Room to Grow

Compeer’s benchmarking research covering over 160 wealth managers in the UK highlighted a promising outlook; the industry is thriving, with record-high assets and revenues. On average, firms are making close to 25% pre-tax profit -margin – a testament to the sector’s enduring strength and adaptability.

However, there is still significant room for improvement in the industry as a whole. For example, IT and Operations costs as a % of revenue can vary by a factor of 10, most firms are still not scalable and at least 20% of firms are making margins of 10% or less (including loss making).

The Growing Focus on System Change

One of the key themes that emerged during the event was the unprecedented focus on system change within the industry. Objectway presented findings from in depth interviews with firms examining why there is an unprecedented focus on system change. Indeed 7 out of 10 firms are currently engaged in this and/or are likely to kick off a project in the next 6 months.

But what are firms trying to achieve through system change? Objectway’s research identified several key objectives.

One of the primary goals is to retain existing customers by enhancing the end client experience. This includes delivering a seamless hybrid experience which is personalised and includes a ‘wow factor’.

Another critical objective is to improve front office productivity. Many firms are seeking to reduce the time their staff spend on administrative tasks and manual processes, which could be more efficiently handled through automation. By streamlining operations, wealth management firms can empower their teams to focus on higher-value activities, ultimately driving better client outcomes and business growth.

Is System Change worth the effort?

System change (or change of any kind) is no small undertaking. It involves significant investment, both in terms of time and resources. However, the potential outcomes are surely worth it. Objectway’s customer case studies showed significant improvements in the client experience measured by a positive (market leading) change in NPS and impressive client growth figures. Productivity also improved markedly with Investment managers able to manage 25% more assets on average and helping firms to move into the top performing quartiles as measured by Compeer.

There is still a lot to fix in Wealth Management but we are talking about a well established industry trusted by its clients and deemed to deliver value. System change should help enable these fixes. By embracing innovation and committing to continuous improvement, wealth management firms can not only maintain their current success but also unlock new levels of performance and client satisfaction.

In conclusion, the insights from the Compeer Industry Event 2024 make it clear: the sky is the limit. With the right strategies and a willingness to embrace change, firms can secure their place at the forefront of this dynamic industry.