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How technology is changing the way wealth is managed

Technology is redefining how people plan for retirement and manage their wealth, causing a shift in the industry

5 min read

Modern Money

How technology is changing the way wealth is managed

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This post is sponsored by Refinitiv.


Christopher Sparke

As technology continues to redefine how people plan for retirement and manage their wealth, many wealth management companies and advisors are tapping into new digital tools to help them better connect with customers, provide more bespoke holistic plans and help with target prospecting. Here, we speak with Christopher Sparke, Refinitiv’s global head of digital solutions, wealth management, about how technology is driving change in the industry.


What changes are you seeing relating to wealth management customers and what they’re looking for in an advisor?

Wealth management clients are growing more diverse.  We are seeing how consumer interest in alternative factors such as environmental, social and governance-based funds — coupled with the focus on acquiring new Generation X prospective customers — are driving a shift to more alternative-based securities. There’s also a move to building wealth plans more focused on longer-term goals rather than beating a benchmark, that’s also driving  portfolio diversity. Therefore, advisors need to formulate plans to reach various types of investors, which means spending more time catering to clients’ diverse needs and expectations. As their businesses grow, many advisors will find it challenging to serve clients across channels in near real time. 

There’s also an emphasis on advisors moving away from solely providing asset management services to becoming more client-centric and hence building goals-based plans. The diversity and more holistic wealth service-related plans are leading to a change in the overall wealth business model.


What challenges can technology help wealth managers address?

Advisors struggle to manage client workflow, given the number of applications they have to use on a daily basis. There’s a tool for onboarding, one for financial planning, one for building proposals, and on and on. That makes workflow connectivity essential.

Some of our recent Refinitiv research found that advisors want to take on more clients, but they can’t because the applications aren’t able to scale. We also learned some advisors feel guilty because they don’t have the time or bandwidth to do prospecting properly.

Having the right technology that works across their workflows will free advisors to provide better service and proactively reach out to new clients. Integrating, standardizing and normalizing multiple sources of data on customers into a layer that can provide consistent services across an advisor’s practice and support taking action is a core area of delivery right now. Ernst & Young found that one-third of clients are planning to look for a new wealth management provider in the next three years. That’s a lot of opportunity for advisors who have the tools in place to capture new business.


How is automation changing the industry?

More people are turning toward self-directed investment plans. That means an increase in demand for data and analytics to help clients evaluate their options and make investment decisions. Clients also need off-the-shelf data enrichment tools to help them create more personalized user experiences. 

Advisors also are increasingly able to leverage data to automate certain functions such as marketing. For example, AI, or artificial intelligence, is automating basic tasks and helping advisors make certain types of decisions, giving them the flexibility to focus on more value-added tasks. Using predictive analytics means advisors can offer clients better insights.

Automation can help only if the data is high quality, and the biggest hurdle to increased use of machine learning is data quality. Unstructured data and data from other sources requires substantial work to yield meaningful business insights. Managers who are digitally transforming all aspects of their business require scalable, open and unified data integration solutions to help lower data management costs.


How can wealth managers better integrate technology into their businesses? 

Clients increasingly expect multichannel access to their information as well as advice and other actionable insights. The core to leveraging technology is to build services on top of a consistent and standardized layer of client data and associated content. Both advisory and self-directed institutions are looking to use technology and AI to support a more sophisticated or bespoke ‘next best action’ or ‘recommendation engine’ that factors suitability and other compliance and risk standards. Advanced analytics has to sit on top of a sophisticated enterprise data management solution. This, in turn, can accelerate solutions that are mobile, offer customizable experiences and provide real value to customers.


Christopher Sparke is the global head of digital solutions, wealth management at Refinitiv. In this role, Sparke is focused on the entire wealth management workflow, working with technology, cloud capabilities, AI and unstructured content to support the digital transformation for wealth managers. He has been with Refinitiv for more than 12 years in various strategic global roles, from managing the advisory and investment business for Europe to expanding buy-side capabilities to financial and risk market development.


To learn more about  Refinitiv’s Wealth Management solutions, click here.