Here we explore the things that have changed forever versus those that will remain the same within the asset and wealth management spheres.
The response to COVID-19 has accelerated several financial industry trends, while leaving other foundational truths untouched.
Every year in our annual Market Outlook , we say that we can’t predict the future and that our crystal ball is just as cloudy as everyone else’s. But we are going to break our rule and talk about where we think the financial industry is heading, as the current situation has compelled many financial services providers to change their approach. While these changes may appear like short-term fixes, we think some will have long-term implications.
Here are some things that have changed for good:
- Working from home. Many companies have already said they are now remote-first; those that haven’t will likely be compelled to come up with a similar plan in the future. The logistics of getting everyone back into an office are daunting – think daily health screenings – and many companies will choose the path of least resistance.
- Virtual client meetings and prospecting with webinars. Older clients aren’t going to be in a hurry to have face-to-face meetings with people who spend their days meeting other people. As such, they will prefer virtual meetings. Similarly, many people aren’t going to rush back to events occurring in halls and convention centres. Enter the virtual world of client engagement.
- Safety and security. From cyberattacks to personal security and diversified supply chains, individuals, companies and governments are making protection a priority. Furthermore, people are will want to protect themselves from job loss and unexpected health problems with emergency funds and robust health insurance.
And here are some things that will never change:
- Focus on the long term. Because the short term is feeling more and more chaotic, the financial industry will continue to focus on the longer term. It’s far too easy for investors, advisors and investment managers to lose sight of their real goals during times of heightened uncertainty. The industry serves investors best by helping investors focus on the financial goals that matter most. Messaging in videos and social media, for example, should continue to focus on the long term, while addressing short-term challenges.
- Value of advice. Given all the recent uncertainty, the financial industry needs to live up to its core mandate – to help individuals achieve their financial goals. History has shown that it is during uncertain times that people need guidance and experience most.
- Increased regulation. While there may be temporary relief for filing regulatory documents, the trend of increasing regulatory scrutiny will not reverse course. In fact, we expect regulation to increase in specific areas, such as cybersecurity.