Seven Game-Changing Trends In Wealth Management In 2020

The demand for experts is continuously increasing in all industries. Expert advice is essential for growth, especially when it narrows down to numbers and money, implementing suggestions of the experts becomes extremely important. You must have legal advisors for the tax and other legalities, but what about the organization’s finances?

Lately, wealth management has gained popularity among individuals as well as corporations. Everybody wants to invest in the right place and avoid risk as much as possible, and thus, the demand for wealth managers is rising everywhere these days. So what is wealth management, and what does a wealth manager do?

Wealth management is an advisory service that deals with financial issues. You can also say that it is a combination of financial advice and assistance. On the other hand, wealth managers are experts who address personal finance problems and satisfy the challenges of affluent clients. People often misperceive investment bankers and wealth managers as two titles for the same job. However, the two entertain different parties. A person with an investment banking career deals with corporate clients, whereas wealth managers’ primary focus is on the individuals seeking advice. If you are interested in finding out more about investment banking and all of its functions you can do so by reading this wonderful Wall Street Prep guide. Fortunately, career opportunities for both are bright, and if corporations are your interest, choose investment banking over wealth management.

Wealth management is among the most renowned sectors in finance. However, the industry is facing many turnarounds, and the latest trends like better technology and changing age of advisors have changed the game for wealth managers.


Here are seven game-changing trends in wealth management that you should look for in 2020:

1. Different Thinking Pattern of Investors

The thinking patterns and expectations of the investors have changed over time. Today’s investors demand in-depth suggestions. The new generation, Generation X and Generation Y are more skeptical of authority but have more faith in their peers’ wisdom. Influenced by smartphones and access to technology at large, the thinking patterns have changed, and the new generation is far different species than baby boomers. New perceptions are now considering risk as a pitfall rather than the volatility, and avoiding risk at all costs is the target – be it through a single investment or portfolio with diversification.


2. Technology-Induced Change in the Field

Advising business has now expanded due to the introduction of technology. Many robots have emerged as advisors, which is making it challenging for WMs to survive. They have taken over 65 percent of the business in the US in the last few years. These technology-based advisors may kick out the human-based advice from the wealth management industry.


3. Huge Amount of Data

The amount of consumer data plays an essential role in the industry, and the information is exponentially growing in wealth management. Technology is making it difficult for managers to survive, but it is easing their job as well. Betterments have introduced zettabytes, making it more effortless for wealth managers to store, organize, and analyze data. Leading wealth management organizations spend millions of dollars in analytics software to efficiently understand the clients and manage operations. Some firms also choose simple MIS systems like client acquisition, business performance management, and supervision to deliver insights effectively.


4. Complexity in Catching the Retirement Wave

The primary concern of all investors is whether they will outlive their assets or not? Although it is a tricky concern of the investors, nevertheless, wealth managers need to address it proficiently. They should address the fear of risk and loss and encourage their clients to plan and save. Retirement planning has a significant influence on investment yields. Wealth managers must tackle retirement planning at all stages of life regardless of age since it is less complicated to teach investors good habits before the time of retirement arrives.


5. Shift in Wealth and Changing Advisors

The growing age of advisors is the most prominent and toughest challenge for the industry. They are not easy to replace because of their lifetime of experience handling tons of portfolios. Many of them are at the age of retirement, so the new generation has to take over from them. Approximately 45 percent of the US advisors are over 55 years of age. Now, recruiting new talent, training them, and change management is the upcoming issue for wealth management firms.


6. Three Lows and Two Highs Plague Investments

With numerous changes in the economic atmosphere, the finance sector has a different investment environment now. New Investors believe in three lows and two highs, which translates to a lesser sense of investment direction in these investors. These two highs and three lows are:

  • Low inflation rate
  • Low-interest rate
  • Low economic growth
  • High financial leverage
  • High volatility

Hence, financial advisors have to tackle confused investors and guide them to better investment yields.


7. Rising Competition

The economy has faced a terrifying financial crisis due to Covid-19, and the competition in the wealth management industry has significantly increased as a result. New firms have entered the market, and business models have experienced change as well. Today, many firms compete to capture the same customers in an ever-shrinking pool, which is another game-changing trend in 2020.



Wealth managers have enjoyed many benefits over the years. However, these trends have been continuously changing, and we can expect a lot more in the upcoming years. Wealth management firms would need to face many challenges influenced by technology, advisors aging out, investors’ perceptions, rising competition, and much more, making it harder for firms to survive.

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