Research Reveals UK Wealth Managers Facing Productivity Challenges

LONDON, 6 June 2024 – SEI^® (NASDAQ:SEIC) today announced the results of a comprehensive review of the state of productivity in the UK wealth management sector that was conducted as part of a strategic partnership with FoxRed Insight and Solve Partners. The research examined wealth managers’ perceptions about productivity barriers across front, middle, and back offices, revealing a need for organisational and industry-wide change to resolve common issues that lead to productivity challenges.

Overall, wealth managers self-scored their productivity on average as a six out of 10, but less than 10% of firms surveyed have specific productivity measures that are reported and discussed at executive and board levels. Relationship management is essential for all wealth managers, but they struggle to improve the productivity of costly front-office resources. Relationship managers spend on average just 43% of their time on “golden time”, including value-add tasks, such as time in front of clients, investing, or business development.

Removing Barriers To Productivity

Wealth managers identified several obstacles to productivity within their firms, including culture, organisational structure, poor communication, inconsistent processes, lack of technology, unreliable data, and compliance burdens. However, the research revealed these challenges are linked to root causes across the industry, including:

•    Complexity of operations, products, and services
•    Client relationship models
•    Effective technology implementation
•    Productivity measurement

Gilly Green, Founder and Director of FoxRed Insight, said:

“Improving productivity is crucial to increasing client satisfaction and profitability. And whilst senior leaders often cite productivity as a top priority, the research shows critical areas where change is needed to help drive growth. Rethinking the client relationship model, aligning behaviours and incentives to desired business outcomes, and implementing technology well can unlock higher-quality client service and empower firms to shape the future of wealth management.”

Improving Scalability

When surveyed on organisational design, 24% of respondents said they had fully outsourced investment operations and were happier with work culture and productivity, as they were less likely to have problems with task hand-offs and inconsistent processes. Firms that had partially outsourced operations reported problems with inconsistent processes and data at twice the rate of other respondents, whilst firms with in-house operating models fell in the middle.

Jim London, Head of SEI’s UK Private Banking and Wealth Management business and CEO of SEI Investments (Europe) Ltd, said:

“Outsourcing can help reduce costs, manual process errors, complexities, and time spent recruiting and training. When done well, outsourcing can significantly impact productivity over time—creating room for growth. One firm in our research saw a 30% to 40% rise in operational productivity through reduced costs and increased scalability after outsourcing. This investment allows firms to focus on improving productivity, increasing the efficacy of revenue generators, and enhancing the front-end experience.”

Measuring Productivity

Despite being a top priority for the C-suite, wealth management firms and the industry as a whole lag in assessing productivity. The study also found little consistency in the type of metrics used across the industry.

Donald Reid, Founder and Non-Executive Director of Solve Partners, said:

“When many business leaders think about productivity, they often focus on financial metrics or tech implementations and task automation to increase efficiency and drive revenue. Developing clear KPIs for productivity that relate to end-to-end, client-centric metrics can then connect colleagues and processes to clearly defined strategic objectives. Agreed-upon productivity KPIs should then be independently tracked and challenged by boards, and success should be linked to individual and team performance.”

Methodology
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.

About SEI^®

SEI (NASDAQ:SEIC) delivers technology and investment solutions that connect the financial services industry. With capabilities across investment processing, operations, and asset management, SEI works with corporations, financial institutions and professionals, and ultra-high-net-worth families to help drive growth, make confident decisions, and protect futures. As of March 31, 2024, SEI manages, advises, or administers approximately $1.5 trillion in assets. For more information, visit seic.com.