It’s not just investment banks that are using automation to cut costs. Wealth management firms are at it too. Like banks, wealth managers need to make savings – all the more so because their growth potential has been vastly exaggerated. A report out today by Deutsche Bank and Oliver Wyman suggests that wealth managers thought their industry was going to grow by 9% annually between 2015 and 2020. Unfortunately, they were over-optimistic, the reality is more likely to be 4%.
This means that something must fall: either margins, or costs. As wealth firms seek to maintain profitability, it’s likely to be the latter.
Deutsche and J.P. Morgan have assembled a handy chart (below) showing where the costs can be taken out of the wealth management industry – either by automation or straightforward culling. It suggests that you do not want to work in operations, reporting, or know your customer (KYC), all of which are ripe for automation and culling. You absolutely do want to work in succession planning, tax planning, or ‘products’ (seeming tailored products created for particular clients’ needs).
You have been warned.