Private wealth managers must urgently increase use of tech or be left behind by competitors


Private wealth managers need to urgently increase their use of technology or risk being left behind by competitors, research from fintech firm Delio suggests.

Its Digitising Private Markets report said that despite nine out of ten financial institutions moving to accelerate their digitisation strategy as a result of Covid-19, just a quarter say that tech plays a core role in delivering private market services.

Delio said the sluggishness of many firms in introducing tech to deliver private markets services came despite them recognising the improvements it could make to back-office organisation, regulatory compliance and enhancing client services.

Delaying adoption of a digital strategy could leave firms trailing behind competitors within five years, according to Delio CEO and co-founder Gareth Lewis.

He said, “Any firm that is serious about providing a complete wealth management service to their clients, needs to deliver a holistic private markets solution.

“Technology will be fundamental to the delivery of these services and needs to be implemented across the board sooner rather than later.

“Firms that fail to act quickly face losing ground and potential new clients to more tech-savvy competitors.

“While I understand that client relationships are still vital in this area, companies can’t become complacent.

“We live in a more instantly-connected world and customers – especially new clients who are more likely to have been entrepreneurial as they generated their wealth – want more digital access to their finances than ever before.

“It’s time to take an omnichannel approach that combines the best elements of technology and personal advice; this will deliver a market-leading approach.”

The difficulties presented by the international lockdowns associated with Covid-19 has meant that 86% of firms report that they have accelerated their digital adoption this year, with 70% making quicker decisions on technology projects specifically.

But more than a third of firms (35%) believe that they will still rely on traditional client engagement strategies in the short to medium term, Delio said,

Lewis added, “Client relationships will still be at the forefront of any wealth management proposition, there is no question about that.

“However, I also believe that technology can enhance how advisers build relationships with their clients.

“If I had an investment opportunity that I wanted to pitch to 50 clients, why wouldn’t I want to share that information digitally beforehand to gauge their appetite?

“Failing to accept that busy clients want to be able to access data at any time, no matter where they are, is a potentially damaging mistake that could cost slow-moving companies dearly.”

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