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SunGard Reveals Top-Of-Mind Issues Among Wealth, Trust Executives

Eliane Chavagnon, Editor - Family Wealth Report, August 26, 2014


Smarter operations and service and front-office innovation are two of the main areas of focus among wealth and trust company executives today, according to a new study by SunGard.

Smarter operations and service as well as front-office innovation are two of the main areas of focus among wealth and trust company executives today, according to a new study by the technology firm SunGard.

Of the 129 respondents to the firm's Striking a Balance Between Innovation, Optimization and Service report, 41 per cent said achieving smarter operations through efficiency was the one thing they would change to make their typical day easier. Meanwhile, 36 per cent said enhanced client service and front-office innovation were their key growth priorities.

When asked to state what they believe makes them stand out in a crowded industry, half the respondents pointed to the ability to provide comprehensive wealth management, followed by: advisory and investment services (45 per cent); a client-centric approach (45 per cent); niche product offerings (33 per cent); and compliance (25 per cent).

Of course, many wealth firms today are thinking hard about whether their business models are suited to serve – and attract – the next generation of wealth. Indeed, SunGard said the study showed that firms are aware of and have considered the client experience through a multi-communication strategy - yet they “remain hesitant to incorporate such solutions.”

Tying in with some of the issues related to technology and innovation is the notion that many firms are struggling to manage vast amounts of data; traditional methods of handling data are “simply no longer meeting the demands of the business,” SunGard said.

“More importantly, regulations, competition and changing client requirements are driving wealth management companies to examine, and ultimately improve, the way they manage data,” it added.

(Click here to view a recent feature on “big data” in wealth management.)

At the same time, many firms are seeking advice on minimizing transactional costs and leveraging scale through managed services or outsourced models, which SunGard said can reduce the cost of technology, free up time and reduce operational risk.

In terms of how executives claim to be addressing the need to grow yet keep in mind operations and compliance, increased IT spending emerged as the top area of focus (38 per cent). After this was: build a technology plan (19 per cent); outsource or co-source non-strategic activities (15 per cent); a business model restructure (13 per cent); increase IT spending to support front office, at asset onboarding level (10 per cent); and staff or vendor management (5 per cent).

Family Wealth Report spoke to Eileen Van Scoy, executive vice president of SunGard's wealth and retirement administration business, about some of the forces behind the report findings.

1) The study says operations are no longer an area of differentiation as firms look for non-traditional service and delivery methods. Could you expand on what this means and since when do you think this has been the case?

Firms are investing in enhancing the customer experience to improving their ability to win new clients while retaining their existing customers. These improvements come in the form of what the client can see and act on within the firm’s digital offerings as well as building out a personalized service and delivery model.  Clients expect a well-run operation that is efficient, secure, and fully compliant at a minimum. Operations, while critically important to the firm, and the firm’s reputation have not been a direct selling point to the client for a number of years.  

2) Do you see a widespread issue of wealth management firms making short-term improvements for immediate value? Do you think it’s fair to say that with the pace of industry change on the tech front that it must be hard for firms to "stay current"? 

Firms for the most part have been very thoughtful in their investments, working to meet the immediate needs of their customers and prospects, while considering the long-term value. It is more than fair to suggest firms are challenged to provide the latest widgets that customers have adopted within their complex and highly regulated infrastructures.  It is also fair to suggest that while the views to the customer are increasingly streamlined, that does not reduce the need for a sophisticated data delivery platform.  

3) What do you think is driving the demand among executives for front-office innovation?

The primary driver for front-office innovation is competition from across the financial services industry to provide a comprehensive wealth platform that will help firms enhance advisor productivity and deliver a more enriched client experience.  The second driver is increasing client sophistication and expectations in terms of interactions with their advisors through the self-service options the firm makes available to them via digital solutions.

4) Besides re-thinking communication capabilities, how else can firms ensure they’re in a strong position to attract and serve the next generation of investors?

Most firms would say it’s all about the direct connections they make with the family members of their existing customers.  Secondly, firms must put the effort into researching and staying in tune with the trends in communication styles with younger investors, including social media combined with digital channels and education. Finally, having a broad-based advisory practice that appeals to various demographics and personal investing styles also is important to the next generation of investors.

5) Do you think wealth management firms do a good enough job of generating client feedback ahead of making bold moves to transform existing operations?

I believe that firms are enhancing their client outreach programs through their advisors, and incorporating client feedback into their ongoing service models. If firms are incorporating client feedback early enough in the process, before major changes occur that impact clients, most clients would contend there is not enough communication occurring around the potential of the changes.

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