Whitepaper: Investor demands and demographics are shifting – are wealth advisors ready?

Ongoing market volatility is prompting investors and wealth managers to recognize the value of portfolio diversification in distributing risk across geographies, industries, and asset classes. The wealth management industry is adapting to a sea change in investing as the market’s prognosis for the short term remains subdued and hazy due to shifts in returns and investor sentiment following a lengthy bull market and low yields.

As such, investors’ appetite for new portfolio strategies, such as direct indexing and alternative and private market investments, drives wealth industry capabilities beyond cryptocurrencies. In addition, wealth management firms are also beginning to refocus on earning the trust and wallet share of the mass-affluent segment and meeting the specific needs of women as they increasingly control more wealth, which is driving more emphasis on customer-centricity and personalization.

Demand for outsourced chief investment officer (OCIO) services and family offices is also rising as wealthy investors seek higher portfolio returns using tax-efficient investment strategies and low-fee trading environments.

Technology advancements will not only help wealth advisors scale by automating manual advisor functions; they will help make customizable portfolios available to more customers seeking tax efficiency, diversification, personalization, and values-based investing while wealth advisors strive to expand their client bases to mass-affluent, women, and younger investors. As a result, wealth firms want to be able to scale portfolio personalization to meet the growing demand for segment-driven advising.

Here, we examine the critical investor trends shaping wealth firms’ future investment, growth, and digitalization strategies.