In the ever-dynamic landscape of wealth management, the concept of scalability often sits at the crossroads of opportunity and challenge. Recently, Compeer and Objectway hosted a roundtable event bringing together senior executives from the UK wealth management sector to delve into this very topic.

The conversation started with a clear consensus: the industry is grappling with scalability. As costs climb and revenues plateau, firms are compelled to enhance their scalability, both in the short and long term.

Interestingly, there’s no one-size-fits-all understanding of scalability within the industry. Executives agreed that for scalability to be effective, it must translate into increased “value-added time” for front office staff. This means streamlining administrative tasks, thus freeing up staff to focus more on client interactions.

Embracing Technology for Scalability

A significant theme of the discussion was the adoption of new technologies. “Legacy systems” were linked to too many manual processes and not enough robust controls while Excel, despite its widespread use for data manipulation, was increasingly seen as a hindrance countering scalable processes. The search for more efficient, scalable solutions is ongoing, with the promise of these new technologies offering a way to overcome many of the industry’s current challenges.

One key area of technological investment is in client self-service systems. Streamlining processes such as client onboarding through self-service tools can significantly reduce manual workloads, a longstanding issue for many firms.
However, the shift to new technologies isn’t without its hurdles. Training internal staff is critical to ensure smooth transitions and maximise the benefits of these innovations. This is especially true as the industry prepares for a generational shift in both clients and employees.

Generational Shifts and Client Expectations

Looking to the future, the wealth management sector must also consider the evolving demographics of its client base. Younger generations are beginning to enter the market, bringing with them new expectations and preferences. High-end, tech-savvy client-facing solutions are becoming more than a nice-to-have; they are a necessity.

Younger staff members, who are often more adept with new technologies and have higher expectations themselves, can play a crucial role in building and maintaining relationships with these newer clients. This not only aids in client retention but also aligns with the broader goal of scalability.

Strategic Investments for the Future

Despite varying definitions of scalability, one traditional view remains prevalent: maintaining or reducing costs while allowing for asset growth. Yet, current industry data highlights a troubling trend – costs are rising across the board. This reality underscores the need for strategic planning and investment in more efficient technologies to manage these expenses. A modular system, designed to boost productivity across both front and back offices, exemplifies the type of innovative solution needed.

How to unlock scalability’s potential? We do not know for certain, but a combination of strategic investment in technology, streamlined processes, and a forward-thinking approach to both client and staff dynamics may well be the key.