Adapt to change or be left behind

Welcome to this latest digital edition of Private Banker International, (PBI). This issue focuses on ways wealth managers can reach the millennial market; solutions to fix the gender gap in wealth management; and best practice on preparing HNW investors for market volatility.

It also features all the winners of the recent Private Banking & Wealth Management London 2018 Awards.

Reviewing the developments over the past year, it’s clear the global private banking and wealth management industry faces huge disruption. In fact, it faces a revolution.

The development of digital wealth management (WealthTech), including robo-advice platforms, Blockchain-based systems, FinTech start-ups and new business models are driving this revolution.

Client preferences are also changing. Consumers are becoming used to a great digital experience in sectors such as retail and travel – and now expect the same in wealth management.

New technologies, such as data analytics, artificial intelligence and Blockchain now enable new and more cost-effective approaches to wealth management. And this trend will only continue as global wealth continues to increase.

Overall, there are many changes, challenges and opportunities for private banks and wealth managers in the UK, and globally, to adjust to. And the disruptive forces rapidly reshaping the industry mean no player can afford to stand still.

Amid the WealthTech revolution facing private banks and wealth managers, regulation and compliance also loom large, putting financial institutions’ profitability under the spotlight and driving industry consolidation.

This year alone, the industry in the UK and Europe has had to invest significant sums and time into ensuring systems and processes are GDPR data-compliant.

MiFID II regulation, launched in January this year, is also impacting private banks and wealth managers in terms of more sophisticated client servicing, client reporting and fee transparency.

Robo-advisers are also increasingly partnering with established players to differentiate themselves from their competitors and service client demand for smart, yet easy-to-handle, digital solutions.

Recent examples of this include BlackRock’s investment in Scalable Capital and Allianz Asset Management’s decision to become the lead investor in UK-headquartered digital wealth manager Moneyfarm.

Looking ahead, uncertainty about the post-Brexit landscape potentially threatens London’s pre-eminence as the world’s financial hub.

UK private banks and wealth managers can make Brexit a success by relentlessly focusing on innovation, putting clients first and being agile.

Overall, in the UK and globally, the investment appetites of wealthy clients are fast evolving.

Private banks and wealth managers must therefore adapt accordingly.

Ronan McCaughey
Editor, Private Banker International