The chaos and uncertainty brought in by the pandemic, compelled people to redefine and reconsider the meaning of their work, time, finance and health. With the evolving dimension of our lifestyle, people have started shifting their focus on asset and wealth management to secure the future of their families. Over the years, financial wealth management expanded to new avenues of wealth protection with wealth preservation and wealth transmission. Individuals are moving ahead of just investment as the goal towards creating a trusted structure, not only for their children but also for the generations to come.
The year 2021 witnessed an immense rise in wealth, estate and succession planning solutions in the Indian Wealth management market. The growth of the industry this year is credited to advanced technologies coupled with the evolving quality of advice on investments, wealth structuring, and estate & succession planning by the institutions. Wealth creation in 2020 stood largely immune to the challenges with global wealth increasing 7.4% to $418.3 trillion and wealth per adult rising by 6% to reach a record high of USD 79,952. Estate planning was one the fastest growing service offerings in the wealth management industry.
While 2021 was a year of immense change, 2022 is going to be the year that will define the next few decades. The industry is witnessing a diverse pattern supplemented with a mix of older generations planning inheritance of their traditional business wealth and rapidly growing suite of entrepreneurs building enterprises to cater to tomorrow’s economic dynamism. Market in the coming year will thrive only if the increasingly evolving demands of these varied groups are met judiciously to make a “value-focused” difference in their lives.
As we march towards the new year, various trends have started cropping up in the industry which will shape up this new-era of 2022.
Advanced Literacy in Finance
Finance as a whole has emerged as a keen focus for individuals across the globe. Financial Wealth management as a concept has gained momentum over the years as people become more financially sound and aware of the need for asset management. The coming year will witness more emphasis and efforts in raising awareness around Financial Wealth Management literacy enabling families to make better wealth enhancement and wealth diversification decisions. Higher literacy in financial wealth management will instill a sense of financial “wellness” and progressively reshape how wealth is discussed, positioned and measured in the society.
Hyper-personalisation and Customisation of Services
Over the years, interaction between clients and advisors will evolve to a hybrid blend of both physical interaction and remote interactions, leading to highly personalised and value driven interventions with the advisors. These new-age customers today are looking for a personalized counsel that is tailored to their specific needs and demands. The industry will back on institutions developing fundamentally data driven innovative services that deliver a more personalised and unique experience. Going forward, advisors need to harness the power of technology to develop offerings that meet the shifting demands of the customers. Many organisations are now deploying predictive analytics to develop value propositions tailored uniquely for each customer.
Diverse Product Categories
The year 2022 is going to be the stage that brings out innovative creative new products for different categories of people based on their income groups, population groups, demographics etc. As the niche builds, it will then move into a phase where the selected products in each niche will slowly consolidate and bring structure across the finance wealth management market. The mid late 2022’s will most likely allow people to experience creatively new- next gen financial products. Money distribution over the year will also be more diverse than we have ever seen in the past. New currencies, economies, products, etc. will open up over the year.
Maximizing Data for Value Creation
The Gen-Z, Millennials and Gen-X clients in the industry are moving towards digital channels for their wealth management. While these changing preferences are providing Financial Wealth Management institutions easy access to a host of customer data, they need to build up on the tools to obtain actionable insights from the data to sustain in this everevolving market scenario. The coming year will need strategies to be developed based on the analysis of unstructured customer data, such as investor preferences, lifetime values, investment history etc. to predict the client behaviour patterns and facilitate up-selling and cross-selling of new products.
Adoption of Advanced Technologies like AR, VR, IoT, ML
With the help of augmented reality (AR) and virtual reality (VR) wealth management firms can make managed investments more interesting, informative and intuitive for clients. Such tools prove to be very useful for attracting and educating the clients in innovative ways. Advanced technologies like AI, IoT, and Machine Learnings are enabling wealth management institutions to develop new ways of harnessing and utilizing client data. These technologies combined with tokenization of data will orchestrate a base that defines the value propositions for the customers.
In the coming year, the industry will witness the most exploratory year ever in finance wealth management with the bridge being built between transaction, value creation and next-generation intelligence.
Views expressed in this article are the personal opinion of Darsh Goleccha, Founder, Monech.