Own a wealth and asset management firm and want to secure success? Start here.
Do you believe the adage: When you stop growing, you start dying? That seems even more true today for entrepreneurs who launched their own wealth and asset management companies. As the wealth management industry trends continue to evolve, staying ahead of the curve is crucial for success in the future of investment management.
You stand in danger of losing the growth you’ve gained due to increasing pressures of customer competition in the wealth management market, technology operations, compliance regulations, an unusual economy and tightening margins.
The reality is, the firms that only tread water won’t just not grow, they’ll also shrink as more aggressive firms capture their clients through innovative client acquisition strategies, especially in the mass-affluent market.
What the best wealth management firms know
If you’re determined to survive and thrive in the next year, here are seven areas that owners need to focus on to be among the firms that are growing and gaining in the asset and wealth management industry.
1. Create agile strategic plans
Strategic plans are useful but should never be so rigid that they can’t grow with your business. Digital transformation helped the five-year plan become the three-year plan. Then COVID-19 hit, and the three-year plan became the three-month plan. New challenges need new ideas, so iterative planning is critical in forward-thinking organizations that are expected to continually change. Wealth and asset management companies have to be flexible and take advantage of opportunities that present themselves, embracing asset management innovation and disruptive technologies.
2. Focus on revenue
To grow, you need to grow your revenue line faster than your cost base. To start asset management company growth, and increase wealth management AUM, you need to constantly look for new and better ways of generating revenue. Finding operational efficiencies can improve your margins — but not always enough to support long-term growth. Exploring new client acquisition methods, such as tapping into the mass-affluent market, and diversifying your wealth and asset management services can contribute to sustainable revenue growth and AUM growth.
3. Invest in the right technology
The right wealth management technology can save you time and money by freeing up your employees to generate that new revenue you need to grow. Every second your asset managers are waiting for a slow system to complete a transaction costs you money. The right tech-enabled solutions can also meet the increasing expectations of investors to have on-demand access and improved customer experiences.
Implementing advanced data analytics tools, artificial intelligence, and cloud computing can provide valuable insights into client behavior and market trends, enhancing your investment operations and enabling hyper-personalization.
4. Empower your employees
If you’re going to focus on growing your business, you will need to provide key employees with an autonomous environment and empower them to make decisions that are consistent with your plans. Delegating to your team can generate a greater sense of ownership and accountability and foster the entrepreneurial spirit — which can lead to more innovative ideas. Developing a comprehensive talent strategy that includes upskilling workforce and continuous learning opportunities can help retain top talent and drive innovation in wealth management consulting.
Letting go and delegating is hard — especially for entrepreneurs who built their firms by focusing on all those details and putting out all the fires. But to grow, you need to trust the team you put in place and leverage their expertise in risk management, portfolio management, and emerging areas like ESG investing and alternative investments.
5. Celebrate the successes
The strongest entrepreneurs are the ones that spot problems and take action to solve them. But don’t forget to focus on what is working. Those successes can be replicated to help scale your firm and improve operational efficiency. Consider conducting a wealth management survey to gather insights on what's working well for your clients and team.
6. Don’t belabor the failures
Mistakes will happen — especially in an agile business growing and adapting to change. Rather than search for blame and assign failure, take an objective look at why something didn’t work and encourage everyone to learn from it. If your team is afraid to stretch out of fear of failure, they cannot be that dynamic team that will propel you to success in the competitive wealth management market.
7. Reward and recognize
A lack of recognition is one of the top reasons why people quit jobs. And each time you lose an asset manager, you risk losing clients — plus it costs you money to search, hire and onboard the right person. Reward and recognize your team when they’ve helped your business grow. Establish a measurable and visible award structure that empowers your managers and gives them increased accountability, especially for high net worth financial advisors and those managing ultra-high net worth wealth management clients.
How Wipfli can help
Our team of experienced professionals understands the unique needs of your wealth and asset management company at all stages of your firm’s life cycle. From business, technology and people consulting to finance and accounting, our holistic solutions can help execute your growth vision and prepare for the future of investment management. We can assist with implementing cybersecurity measures, exploring blockchain applications, and leveraging generative AI to enhance your operations and client experience.
As the wealth management industry continues to evolve, staying ahead of trends and embracing innovation will be key to securing your firm’s success in the dynamic global asset management market. From exploring digital assets and tokenization to enhancing data governance and forming ecosystem partnerships, the largest wealth management firms are constantly adapting to meet the changing needs of institutional investors and private markets alike. By focusing on product innovation, personalized investment advisory, and increased control and transparency in asset management, your firm can position itself for sustainable growth in this competitive landscape.
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