In 2018, just like it has been in the past years, changes and trends in wealth management will be inevitable. Amongst the trends that wealth managers should prepare themselves for includes changes in regulations, intergenerational changes in property ownership and innovation.
Then, there is the impending issue of Common Reporting Standards (CRS) and Markets in Financial Instruments Directive II (MiFID II) that will have to be complied with.
Client demographics will change, the growth of cryptocurrencies will have an effect on the investment landscape as well as monetary policies being revisited by Central Banks. The key to the retention and acquisition of clients will be aligning to these trends this year.
Compliance with Regulations
The global wealth management sector is one known to respond sluggishly to change. However, these days, regulations are set in place to make adoption to change a must, rather than a matter of choice.
Compliance and adoption of MiFID II will mean increased transparency as processes will be digitized and more professional tools used. The reliance on Excel will, therefore, be reduced, hence a better electronic connection between custodians and brokers.
Rise in Technology and Automation
In a bid to reduce operating costs and appeal to the younger generation that has an obsession with technology, companies with have to be more creative and adapt to technological advancements. Just to mention a few, e-Wallets from DriveWealth and PayTM in India represents an advancement in technology and automation, in order to better serve the end user.
In 2018, wealth managers should look forward to creating more personalized services, with the aid of technology. In the process, the company would be looking at reducing the operations costs as clients look to not incurring any additional costs for the services.
Cryptocurrencies Becoming Mainstream
Over the past of a couple of years, clients have been looking for newer ways of making the investment. In a rush to bring out of the box investment solutions, cryptocurrencies investment products are gaining popularity.
A classic example is the rise Bitcoin, a form of digital asset investment. This year, many more of these are sure to crop up, adding to the likes of Ethereum, Bitcoin Cash, Dentacoin, Litecoin etc.
Central Bank Revising Monetary Policies
In light of changing inflation rates, and volatile markets, various central banks will have to revise their economic policies in order to stabilize their economies. As it is, most economies have not quite recovered from the economic meltdown of 2008.
There is every indication of the Federal Reserve will raise the interest rates in the wake of rising inflation rates. Most banks are likely to follow suit.