Global Wealthtech Summit 2022

The Global Wealthtech Summit took place this November, offering a forum for discussion on the challenges and innovations within the industry. FSL were a sponsor at the Summit, and the team had the opportunity to meet with delegates and share more about the company at the FSL stand, while also attending the panel events.

Amongst the key themes at the Summit was that of a client-centric approach to service provision. Speakers from PIMFA, InvestCloud, Lazard, HSBC and Northern Trust discussed the importance of the new consumer duty standards. In addition, they maintained that identifying and understanding clients is key to a company’s success. This should include understanding the customer journey and providing “moments of surprise and delight”.

The use of technology as a means to drive client acquisition was also highlighted by panellists. Technology specialisation was emphasized as necessary to grow a new client base, particularly in the under 40s demographic. A key challenge here, however, is that transitioning to new technologies may pose a burden to some companies, especially those with legacy systems. Companies aim to implement these new technologies in an efficient and seamless way, perhaps with third-party assistance.

The Summit also considered another key challenge facing the wealthtech industry: inflation. While the industry has experienced 20 years of growth and low interest/inflation, turbulence is to be expected in the years to come, as the economy suffers, and interest rates rise. This will pose the single biggest challenge for investors over the next decade. Panellists at the Summit suggested that investors no longer look for passive products and instead move to more active investment strategies in an effort to overcome this challenge.

Despite these challenges, the Summit also touched on the opportunities and growing sections of the industry. Intergenerational-wealth transfers are expected to increase. To accommodate this increase and to retain clients, wealth managers should understand their client preferences (including their technological and investment preferences) and frustrations.

Finally, Sustainable Investment was predicted as one of the largest growing areas of the industry. Despite its growing prominence, however, anti-ESG laws have been passed, such as the legislation in Texas which bars State bodies from engaging with banks that boycott ESG-adverse companies (such as oil and gas companies). On the other hand, a multitude of legislation furthering ESG investing is seen around the globe, such as the new MiFiD requirements and FCA Sustainable Labels. There is therefore a need for greater consistency from regulators globally to coordinate efforts towards ESG and Sustainable Investment.

Overall, the Global Wealthtech Summit provided an insightful look into the industry as it stands today and where it may go in the future. While many challenges were identified, just as many possible solutions were provided, offering a promising view of the growth and opportunities to come.