9 Trends That Will Rule the Portfolio Management Services in 2016
The global explosion of wealth especially concentrated in the hands of young individuals has brought about a massive change in the investment portfolio and wealth management services provided by firms. The high net worth individuals are looking for investment options that will not only reap monetary benefits but minimize the chances of risk involved as much as possible. Specialized advice is a priority for them combined with improved client reporting effective management. Firms have therefore revamped their services to suit the growing demands of these young high net worth individuals.
The new age portfolio management systems cover a broad spectrum of services which includes tax reporting and fund accounting to highly complex and sophisticated features such as risk analytics and valuation modelling. In such a volatile market where situations are governed by the individuals, new trends are set to emerge at a quick pace. Firms looking to remain profitable will have to conform to the current trends to enjoy a top position.
Let’s take a look at the major trends:
· Portfolio analysis, performance calculation and risk analytics have emerged as the three most important areas where portfolio managers need to invest to win back client confidence.
· Clients that belong to HNW (High Net Worth) category demand transparency and clear reporting from firms. They are more demanding about functionality and granularity in their periodic reports.
· The turmoil in the market condition is such that firms are finding it difficult to standalone, mergers and acquisitions have therefore becoming a common phenomenon to survive the market turmoil
· Firms have shifted their focus from developed markets to emerging markets. In particular firms are eyeing the Asia-Pacific which region which has moved from third to second largest region for high net worth individuals, surpassing Europe
· The business models are being revamped by asset management firms to better support resiliency and flexibility
· There is a robust attempt in making a strategic shift to becoming an advisor-facing and client-facing company, evolving technologies accordingly
· The use of trading platforms is increasing
· Exchange Traded Fund (ETF) products is rising globally
· Companies are making a genuine effort to understand the client’s interests, needs and wants better and are turning to social media to establish a connectivity
The future is definitely bright and luminous and the coming years will significantly provide opportunities for the wealth management industry, despite greater pressure and scrutiny from regulators. A better economic growth emerging in the Asian and Middle East markets has led to a rise in the number of high net worth individuals who are looking for better investment options. This has created new markets and opportunities for both wealth managers and buy-side firms to expand their presence in these regions. There is a significant alignment of interest between the fund manager and client and this will take centre stage in the new age business model.