Professional Adviser: Solving the productivity puzzle: Technology is a powerful tool

Maximising productivity is a key focus for CEOs, but they're finding that it's easier said than done, writes Jim London.

From evolving political and economic environments to persistent regulatory changes, the wealth management industry is in the midst of an evolution that's causing leaders to question how they can drive growth. For many executives, the solution is turning productivity challenges into opportunity. 

Maximising productivity is a key focus for chief executives (CEO), but they're finding that it's easier said than done. Although many feel new technology is the missing piece in their productivity puzzle, they're not experiencing the intended value post-implementation. The problem isn't necessarily with the technology itself—it's likely the lack of planning for implementation. Businesses considering new technology should first focus on defining a clear vision for the future and align their technology and business strategies before building an implementation roadmap in order to reap technology's benefits.

The productivity problem

Productivity has the powerful ability to improve an organisation's profitability by freeing up time for managers to focus on clients. However, whilst relationship management is crucial for all wealth managers, managers self-reported their productivity at a five out of 10 when considering the front office alone, according to recent research. In fact, 57% of relationship managers' time is spent on activities that aren't classified as client- or revenue-generating. 

The proportion of time also increases as the size of the business increases, with relationship managers at large firms spending roughly only one-third of their time on those activities. This has left senior leaders seeking solutions to productivity challenges, particularly as the industry faces increased fee and cost pressures. 

Technology has the potential to help wealth managers increase productivity with faster systems, better data, and enhanced interoperability that help individuals lessen the administrative and regulatory burden. However, the UK wealth management industry has a history of unsuccessful technology implementations. The number of businesses cancelling major implementation projects is far lower than a decade ago, but overrun and overspend are still relatively common. This points to the complexity of overhauling legacy technology at the core of these businesses, but it also suggests that implementations can and should be better planned and managed by following principles that simplify and support the process.

Rules of engagement

First, it's important to have a clear vision and purpose for any project that's supported or sponsored by the CEO and board. Without an intended outcome, projects can have a fast start with high energy but lose momentum due to unclear goals and objectives, or fail to maintain funding as other priorities arise. The vision should be supported by clearly defined principles, such as "adopt not adapt", "outsource all non-client functions", or "digital-first". Once identified, these strategies must act as the beating heart of all technology implementations. 

It may seem daunting to identify and follow guiding principles throughout the planning and execution stages, and a strategic partner who understands a business' unique goals and culture can help manage a successful implementation through completion. Strategic partners can be particularly helpful when defining a target state, which includes identifying the key pain points, challenges to solve, and business functions' involvement throughout the project. Working together to plan key operational items, such as data strategies, organisational model changes, and key objectives is critical to building an effective implementation roadmap. 

After defining desired business outcomes, leaders should establish metrics that can ensure projects are progressing on time and on budget. A good plan should go beyond delivery outcomes—it should also outline the individuals responsible for each step in order to drive accountability and successful outcomes. While less than 10% of firms track specific productivity measures at the executive and board levels, implementing measures to track the progress of underlying products, services, and operating models can help businesses remain focused on areas for productivity gain.

Culture considerations

Clear communication channels and collaboration across firms and suppliers are not only paramount to successful implementations, but they're also critical for reinforcing a strong cultural foundation. Transparency, education, and working together is critical to helping bring employees along the transformation journey. With success contingent upon delivering against the organisation's identified business outcome, an effective strategic partner can deliver substantial efficiencies and manage a successful implementation process. But they also play a key role in managing the people and process side of implementations—an important and often overlooked cultural aspect. 

Technology can be a powerful tool in helping wealth managers focus on high-quality client service and revenue-driving activities. But the output is only as powerful as the input. Planning for implementations is just as important as the end outcome in order to challenge the status quo and break down barriers to high productivity, and ultimately, good client outcomes.

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: 

• Wealth managers self-reported their productivity at a five out of 10 when considering the front office alone.

• 57% of relationship managers' time is spent on activities that aren't classified as client- or revenue-generating.

• Relationship managers at large firms spending roughly only one-third of their time on client- or revenue-generating activities. 

• Less than 10% of firms track specific productivity measures at the executive and board levels.