Professional Adviser: Aligning strategic investments and operations: A blueprint for success

In the competitive landscape, optimising operations through strategic investments that align to business strategy is crucial, writes Jim London.

In today's dynamic wealth management landscape, the alignment of strategic investments with operational needs has become a critical imperative for firms seeking to thrive.

This alignment is fortified by three key principles: the growing demand for a modern wealth management experience, the essential need for a unified infrastructure that supports scalability, and the strategic advantage derived from data-driven decision-making.

By integrating these elements, organisations not only enhance operational efficiency but also bolster their capacity for sustainable growth — and meet both clients' and regulators' evolving expectations.

Modernising to meet the demand

The growing demand for a personalised, end-to-end wealth management experience continues to put pressure on advisers.

Industry consolidation, often facilitated by private equity backing, has led to the formation of larger advisory firms that are faced with evaluating a larger technology stack — which usually includes legacy platforms and choppy processes. Those fragmented processes and platforms can present significant integration challenges, resulting in a fragmented customer experience.

Modernising that customer experience requires making strategic investments in the right technology and operational areas.

From analysing large data sets and meeting regulatory compliance to workflow automation and communicating complex information to clients, operational elements not only impact how connected the experience is for advisers and their customers — they also impact the amount of time an adviser spends with their clients.

In fact, relationship managers report only spending 43% of their time on client and revenue-generating activity, highlighting the need to increase productivity to deliver the personalised experience that customers expect.

Advisory firms should identify the operational efficiency gaps, assess their technology infrastructure, and build a plan that maps investments in that infrastructure to strategic business benefits that can be gained.

Building a unified infrastructure to scale

Achieving scalability in the wealth management sector hinges on more than an investment portfolio's performance; it requires advisory firms to harmonise disparate systems to gain operational efficiencies, deliver a connected customer experience, and have the flexibility to scale for the future. Many consolidators initially overlook the importance of a cohesive technological framework, when it should be a key component of this approach.

As the industry experiences heightened consolidation, the focus on infrastructure is becoming as critical as strategic growth initiatives. Research from EY highlights that a scalable, unified infrastructure enables the delivery of tailored advice and services, as well as enhances compliance management across diverse jurisdictions, facilitates the data management across multiple cloud environments, and guarantees a level of flexibility essential for long-term scalability and adaptability.

As a result, creating highly repeatable processes will be critical to increasing efficiency and offering a seamless client experience as firms continue to grow.

Importantly, seamless data integration can lay the foundation for future growth and adaptation to changing market dynamics.

Leveraging data to make confident decisions

Successful wealth management relies on data-driven decision-making, and the right technology investments can transform data into actionable insights. Leveraging data empowers wealth managers to swiftly analyse market trends, assess risks, and capitalise on opportunities with precision. A data-centric approach can enhance portfolio management and client advisory services, ensuring informed decisions are being made promptly.

Key areas to focus on include:

• Integrating advanced analytics platforms that can aggregate and analyse data from multiple sources
• Implementing AI and machine learning algorithms to help uncover patterns and trends in client behaviour and market conditions
• Investing in robust data governance frameworks to ensure data quality, security, and compliance as we drive into a future that is firmly digital-first
• Fostering a data-driven culture across the organisation, including training staff on data interpretation and continuously refining data strategies

In the competitive landscape, optimising operations through strategic investments that align to business strategy is crucial.

Many firms struggle with disparate systems and inefficient infrastructures, making a systemic approach essential for staying ahead. Aligning existing strategies can be complex, but a strategic partner can help firms build a technology roadmap that's aligned with their business goals.

As a result, wealth managers can focus on what they do best: growing their businesses and powering the future of wealth.

Important information

This article references research conducted by FoxRed Insight and Solve Partners and commissioned by SEI, “Maximising productivity: How wealth managers can turn challenge into opportunity,” 4 June 2024. The research incorporated findings from a survey of 65 wealth management firms and qualitative interviews with 25 C-suite individuals. The research was conducted in late 2023. The following information can be sourced to this research: 

• Relationship managers report only spending 43% of their time on client and revenue-generating activity.

• Creating highly repeatable processes will be critical to increasing efficiency and offering a seamless client experience as firms continue to grow.

The following information can be sourced to EY:

• A scalable, unified infrastructure enables the delivery of tailored advice and services, as well as enhances compliance management across diverse jurisdictions, facilitates the data management across multiple cloud environments, and guarantees a level of flexibility essential for long-term scalability and adaptability.