Wealth management not immune from rapidly changing times
WE live in rapidly changing times, and the wealth management business is no exception. Three critical shifts are occurring which are fundamentally shaping the way we will do business and the services we will provide as wealth managers in the future.
The first of these shifts is about the changing nature of wealth: the speed at which wealth creation is accelerating and the increasing mobility of the wealthy. More first generation wealth exists today than ever before - it is now possible to create a billion pound company in three to four years when it used to take three to four generations.
Today’s high-net-worth individuals are also more mobile than ever before, with nearly half (43 per cemt) of the 2,000 wealthy individuals Barclays Wealth and Investment Management recently surveyed having lived in more than one country. The wealthy are increasingly mobile geographically and move between countries in order to fulfil their international career aspirations, seize financial opportunities and ensure a better quality education for their children.
The offspring of the current generation of wealthy individuals are even more likely to lead international lives, with most of those we surveyed expecting their children to live in more countries than they have lived.
Secondly, the regulatory environment in which we operate is becoming more rigorous and stringent. Wealth managers need to be sophisticated and have sufficient scale in order to provide a robust control framework that makes sense for a complex matrix of client profiles, geographical markets and product offerings.
Regulators increasingly require a heightened level of transparency of charges, transactions and product features, both for themselves and for clients through regulation like Markets in Financial Instruments Directive 2, Retail Distribution Review and Packaged Retail Investment & Insurance Products regimes. We support their aims, but regulatory initiatives like these will demand significant investment in systems and much more industry collaboration than we have seen before.
The third, and perhaps most important shift, is technology, which is driving fundamental change across many industries – and financial services is no exception. Clients expect instant, direct, on demand and transparent access to their bank account and investments at a time of their choosing.
We think that the personal service offered by bankers can be enormously enhanced with technology and, while technology shouldn’t be an end in itself, it does have the potential to create a level of client engagement that has not been seen in our industry so far.
:: Jonathan Dobbin is head of wealth and investment management NI at Barclays. He can be contacted on 028 9088 2925 or email email@example.com.