Building a future-ready investment firm

Global megatrends are reshaping the landscape of the wealth management industry and redefining investor needs. To stay ahead of them, investment management firms need to revisit their strategies, with a greater emphasis on investor expectations and competitor analysis.

To analyze how investment firms are planning to meet these fast-changing expectations, Deloitte, in collaboration with ThoughtLab and other industry specialists, conducted a global survey of investors and investment providers and researched how the industry is evolving. We looked at the impact of megatrends, including technology, regulations and taxes, competition, demographics, and economics.

Our findings can help the industry navigate this new landscape:

Diversify your clients

• Win with modernization
  The changing face of investors demands personalized solutions and a more inclusive advisor base. Investment firms must harness technology and data to understand these needs, find market niches, and tailor their offerings accordingly.
• Capitalize on client diversity
  As investors become more diverse in age, location, gender, wealth level, and lifestyle, firms that leverage technology and data will have a competitive edge. This includes building a diverse advisor base to cater to the varied needs of clients.
   

Realize digital 3.0

• Redefine digital for investors
  Embrace the next generation of digital services, leveraging digitally enabled functionality for tasks like account opening, transfers, and communication with advisors.
• Innovate to drive performance
  Seamlessly blend high tech with high touch, using technology to enhance advisors' capabilities, automate mundane tasks, and deliver a superior client experience.
• Empower the future advisor
  Technology is revolutionizing the role of financial advisors, enabling them to manage a larger client base and offer more personalized, comprehensive advice by automating routine tasks.
   

Augment your value proposition

• Unlock the wealth curve
  Driving investment opportunities across wealth levels requires democratizing products and services. Firms should offer high-value options, from alternative investments to private banking, to a wider range of investors.
  
• Rethink future offerings
  Investment firms must reimagine their offerings for the next era of investing. This includes using digital solutions to drive down costs and providing financial education and tools to make investing more accessible to all.
• Redefine sustainable investing
  Investment firms need innovative sustainable offerings that balance market returns with positive environmental impact and address potential misconceptions.
   

Adapt your market positioning

• Leverage outsourcing for efficiency
  Outsourcing middle-office and operational functions streamlines core activities to provide leverage. This enables providers to serve more clients and operate at a lower cost, freeing up resources for strategic focus.
• Drive value from advisory services
  Firms should consider fee-for-service options, fee reductions, and performance-based pricing to drive client value and to attract and retain more clients.
• Harness the power of data
  Personalizing wealth management services at scale hinges on data. By analysing multiple data sources, firms can better understand investor preferences and behaviours and adjust their market position.
   

Drive innovation via AI

• Unleash wealth management with AI
  Artificial intelligence has transformative potential for wealth management, enhancing both client experiences and operational efficiency. Firms can look to adopt an AI-focused approach for business growth.
• Empower in-house solutions
  Explore building in-house solutions using AI and low-code tools for cost savings, customization, and market differentiation. Low-code no-code tools and generative AI can facilitate this transition.

What is evident to us through this study is that new entrants will serve as catalysts for change and showcase what is possible. Ultimately, the industry is capital-intensive and those with an established investor base and large balance sheet are likely to come out on top.

The true winners will be the end investors and their families—the primary metric by which future success should be measured.