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Wealth management has seen the tremendous transformation over the past decade, but this has also come with a number of challenges. With so many market players leveraging the power of technological advancement, we decided to outline some of the key challenges top executives of industry-leading companies predict for their businesses in the future.

Accumulating Substantial Regulatory Capital

CEO of DriveWealth Holdings Inc., Bob Cortright, mentioned that, like many other market players, his company is a part of a highly regulated ecosystem. This means that it takes a lot longer to build the infrastructure compared to other industries. DriveWealth acts as a carrying broker that makes transactions on behalf of other brokers, so a great deal of regulatory capital is necessary to get the business up and running:

“We carry other brokers on our back. For us it’s always about building our capital base because our partners are large players in the space, who want viability for us.”

Bob went on to explain,

“[To be viable is] to have a price point where you can make money and the business makes sense.”

The DriveWealth executive is confident that advisors cannot be “jacks of all trades,” because we are soon going to see many more custom-tailored solutions, where the customer will have a much better end product at a very reasonable cost. Bob sees the key challenge for his business as staying focused on what they’re good at: the backend infrastructure to support all these offerings.

Staying Focused on the Chosen Path

Martin Polasek from Swiss company Evolute also sees the biggest challenge for his company to lie in keeping their focus laser-sharp:

“We still have to focus on a particular niche to be ahead of others. I think the focus is absolutely essential.”

Refining Big Data

Another aspect to keep an eye on is data management. According to Martin:

“I think data analytics and data quality is sort of like the backbone of digitalization.”

Evolute’s CTO emphasized that for automation to go smoothly, the raw data must be of a high quality that would allow for a flawless handover/takeover of the task from human to machine.

Borys Harmaty, CIO of FolioFN who is halfway through with an MIT course in big data and evolution, mentioned big data as a new aspect for the firm to embrace:

“… transforming our firm to handle [big data] is another big challenge.”

Facing Change and Managing it Well

Greg Vigrass, President of Folio Institutional, sees the greatest challenge of all to lie in helping their allies to manage change. With the immense advancements in technology, Greg is positive that the coming years will be “the fastest moving period in the history of financial services.”

“I think it’s kind of like drinking from a fire hose. There are so many options and solution sets out there.”

Greg sees the duty of his business as centered on working with people to help them figure out where natural integration points are and how particular things affect their business, so that they make their efforts in the right direction.

Doing Your Best to Secure Stability

We also spoke with the founder of the first investment bank for millennials, who brought the members of Generation Y in line with HNWI in terms of services offered. Sid Sharma, CTO of Hedgeable, revealed his concerns about the possibility of another financial crisis occurring. He feels that it’s his personal responsibility to create an outstanding investment product that will allow customers to secure a bright future:

“We can’t define policy or what the humongous plans do, but what we can do is to create a great investment offering so that people don’t have to face such a situation [i.e., a financial crisis] again.”

Recruiting the Best Talents the Market has to offer

Jigar Vyas, founder and CEO of Invessence Inc., feels that finding talented people might become an issue, not only for his own business but industrywide. Michael Frank, the company’s COO, adds that the overall expansion within wealth management is making the landscape highly competitive, even on the resource front, as everyone is trying to get the cream of the crop to join their teams, whether that’s in marketing and sales, or engineering:

“Everyone, including our competitors, is expanding at a very fast rate. Thus, nearly everyone is always looking for talented people to continue the expansion successfully.”

Prioritizing Features in a Consumer-focused Setting

According to Anton Honikman, CEO of MyVest, while the whole industry is undergoing a shift from product-centric to consumer-focused offerings, dealing with competing priorities is a primary challenge:

“Juggling competing priorities is the key challenge we see for ourselves in the near future.”

Another point on MyVest’s to-do list is increasing its brand awareness:

“We’re in a context of building our brand awareness, having more people understand the value-prop to a broader set of constituents.”

Aligning All Ideas with Business Strategy

Brian Sachdeva, CTO of Canadian company NexJ, has his teams focus on multiple business areas, though he says it’s not easy to keep all those aspects in line with the greater strategy. The maneuvers need to be correlated with overall business appetites for growth:

“Just keeping all those different focuses aligned is the tough part, and continuing to scale our business as we take on more and more clients.”

Scaling Business Wisely

Mark Shilshtut, Director of Engineering at Vestwell, a retirement management firm that has redefined the 401K, sees the key challenge for the team to lie in finding ways to scale the demand for features:

“… [when] bringing new features, how do you scale with being able to be plug and play into different components.”

Bottom line

Growing client needs and expectations, with more requirements for transparency and ease, have set a new pace for wealth management and industry players, who have to embrace new business models and refine their business processes for their offerings to gain momentum. With the continuous rise of technology, we will see market leaders coming up with more daring ideas to battle the challenges the emerging trends impose on them.

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