The wealth management landscape over the decades. Ode to a pioneering holistic solution!
Abstract: High Net Worth Individuals and institutional enterprises were always looking to invest their capital in a discreet way in order to have stable and positive returns on a long-term scale. In the wealth management sector, discretion was a key factor, thus requiring mutual trust between all the acting parties. Over the decades since 1980, a plethora of things has changed, from Swiss private banks to Artificial Intelligence advisors.
Iqbal Khan from Credit Suisse quotes: The cumulative effect of falling revenues and increasing costs is causing cracks to appear in wealth management firms. Some have noticed an increase in fees on custody to compensate for lower investment management fees, for example. He also says some client segments have suffered. Clients are only going to be willing to pay for quality advice and they won’t be willing to pay for transactions at all. The transparency is now there for them to make those value judgments.
Make no mistake, the familiar landscape of the wealth management industry is about to undergo a seismic shift. And when the revolution comes, it will be led by some familiar faces. In New York, former Morgan Stanley wealth management head Greg Fleming, now chief executive and co-owner of Rockefeller Capital Management, has a new brokerage licence and is also building strategic advisory. In Switzerland, Michael Baer, scion of a family synonymous with private banking, is getting ready to open the doors of his new merchant bank. Marc Syz, son of the founder of one of the most successful private banks launched in the past 25 years, is on his way to Asia to make the first deal for his new private market investment and advisory business, Syz Capital.
Jürg Zeltner, Head of UBS Wealth Management department, the man behind UBS’ stranglehold on global wealth management in the decade since the financial crisis, is starting a new venture — rumoured to be a boutique. Sallie Krawcheck, who ran both Smith Barney and Bank of America’s wealth management operations, is making waves and attracting assets at Ellevest, which she set up five years ago.
Alongside these new focused and nimble entities, family offices are increasing, multifamily offices are expanding and specialist wealth managers are emerging to serve specific segments such as impact investors, women, or even clients that want the autonomy and low fees of a digital adviser. Industry executives are quick to draw a comparison with other financial services sectors.
Over the last decade, a slew of senior investment banking executives has bid farewell to their respective houses to launch their own boutique advisories and fintech businesses. Before them, hedge fund managers had spun out of asset management firms and investment banks. It is now the turn of the wealth management industry to have its reinvention, insiders say.
For a decade, there have been predictions of a barbell industry of large scale players offering breadth and global reach, and specialized firms at the other end that go deeper for fewer clients. Now that a perfect storm of cost and revenue pressures, technology, transparency and client demographics has occurred in the wealth management industry, those predictions look like they are finally coming to life.
Wealth management is a scale business, so to survive boutiques will need to have a premium pricing model, and the good ones will do that through exceptional service and leading with lending products — James Gorman, Morgan Stanley
Tom Naratil, co-head of UBS Wealth Management, points to the data.
“The next decade is going to be more complex and clients will require more advice,” he says. “Global trade economics, the political environment and pace of change is cause for concern for clients, and they need guidance.
It highlights the necessity of having a global footprint and reinforces the need not to be international — which a lot of firms are — but actually to be global, onshore in every region.” The boutiques and specialists cannot claim to be plugged in globally to the same extent, but they can counter that they can go deeper into one segment, whether that is specific geography, style or client sector.
As an industry, we’ve stopped competitive hiring, and it’s clear that some of the larger firms will be reducing headcount in the next couple of years. Our goal is to grow-Andy Sieg, Merrill Lynch Wealth Management
In 2005, it would have been hard for us to think about doing what we’re doing — to be able to compete on platforms and processes with a large firm. Now you do not need scale to be competitive on technology — Greg Fleming, Rockefeller Capital Management
Undoubtedly, wealth management firms are exploring how they can use AI to make their relationship managers more productive, and the digital experience richer. MPCX, a digital wealth management platform, for over a year has been striving to build state-of-art wealth management tools for HNWI and institutional users, while also giving the opportunity for retail users as well to experience such products.
DSIM, or Digital Smart Investment Mandate was designed carefully to deliver a new perspective for digital wealth management, innovative, intelligent, efficient. MPCX applies a roboadvisory protocol through Digital Smart Investment Mandate, which will offer automated portfolio rebalancing, crypto lending strategies, based on your:
- Crypto Investment Risk Tolerance
- Digital Investment Objectives
- Crypto Liquidity needs
- Further unique crypto wealth creation aims.
The protocol processes all client’s information and creates an appropriate digital investment strategy in the context of the client’s overall digital financial plan.
In conclusion, an institutional partnership on co-building AI wealth management advisors with an IT giant is already being signed and will soon be announced. There will be a contest with a plethora of prizes for those who can guess right the name. Will it be you?
In MPCX, we strive daily to overcome conservatism in our industry, by shaping the future along with the market “Goliaths”. Don’t forget to subscribe in our newsletter via our website mpcx.co, in order to always stay up to date regarding our latest development progress. We are just getting started, … do you?
Solutions Architect of MPCX Platform Ltd.
Telegram: @TasCrypto | Twitter: @akaTasos | E-mail: Tasos@mpcx.co