Objectway features The Wealth Mosaic WealthTech 2023 Report looking at how technology has a beneficial impact on operational efficiency, adding positively to the bottom line.

It is well known that wealth management massively varies in terms of operational efficiency. One of the biggest influences is the extent to which they grapple with legacy systems that do not speak to each other and often end up creating more issues than they actually solve.

The result is that operating with these legacy systems creates a whole efficiency drag. The effect can be seen on the business as a whole and the individual adviser. An inefficient firm means inefficient processes, time-consuming manual administration tasks, prone to error and taking the adviser away from the primary job of nurturing relationships and providing a value added customer experience.

Operational efficiency frees the adviser to spend more time with clients, and we have seen an increase in productivity as measured by the front office being able to manage 25% more in AUM without increasing headcount. In addition, having the right technology also incentivises attracting and retaining advisers and managers. If an adviser can better serve more clients at a time, then the AUM should increase, which adds to the firm’s bottom line and the adviser’s incentive package.

Technology is the enabler

But efficiency is not just at the front end; it relies on the systems and data underneath to serve up data and information, as well as suggestions on what to do next, whom to contact, and what to say. Thus, middle-and-back office efficiency when it comes to process and data are also critical.

Technology can play a massive role in solving these issues, providing straight-through processing, automation, data management, process integration, and streamlining.

Wealth managers know this, and they are starting to act on it. We think up to seven out of ten of wealth managers are now actively changing systems either by prioritising areas of the business that are in need and can be most efficiently and effectively changed or by adopting a big-bang solution.

Spending both time and money on IT in a targeted and task specific way to bolster operational efficiency is worthwhile. If change is implemented with specific, measurable goals, a positive correlation emerges between spending and profit levels.

A Case study on how to become a leading digitally-enabled wealth manager

Our client was on a mission to become a leading advice focused, a digitally-enabled wealth manager in the UK. The objective was to expand the target market by prioritising and accelerating the digital agenda to meet the new generations’ demand and increased digital expectations.

Key strategic priorities included developing an operationally efficient, and client-centric online experience that served and connected anytime, anywhere; increasing adviser efficiency with more client face-time and increased share-of-wallet; building a scalable and flexible platform for sustainable long-term growth.

The three phase process started by deploying the portfolio management component to serve advisers with insights, and relevant and actionable information to respond to client preferences with a personalised advisory service. The following phase focused on empowering clients to access investment information through an omnichannel digital experience platform. It comes along with holistic support of client lifecycle management and onboarding, including ongoing service delivery with suitability reviews and periodic and ad-hoc events.

The end result was that the firm was able to increase AUM by 25% and improve adviser capacity by 25%.

The customer now has the opportunity to achieve the desired goals in terms of growth, relevance, and efficiency and to continue developing their client experience, providing more choices for more clients, and enhancing a culture they are proud of.

Read the full report in collaboration with The Wealth Mosaic.