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Wealth & Investment Management

How can traditional wealth and investment companies stay relevant today?

Posted by on 12 June 2024
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I’ve just been scrolling through the extensive agenda for this year’s IMpower | FundForum and once again, it looks like it’s going to be a fascinating few days.

The great thing about investment conferences, of course, is that they generally reflect the “live” world around us – geopolitical events, macro or micro economic shifts, regulatory changes and of course, the demographic movement impacting the fundamental source of capital.

IMpower | FundForum has always stood out for me because it brings together a collection of global views and experiences rather than just, from what could sometimes be described as, the echo-chamber of the UK market.

For me personally, this year is different. Firstly, I appear to now be an “industry veteran” – a new title and one which my young mind struggles with!

That aside though, I’m also attending under my own steam and no longer part of a large corporate which is a new uniform to wear. Whereas in the past I was constrained, or cossetted, by a prescribed company view or central proposition, I can for the first time in 37 years, look through a clear lens.

That also means that I’m choosing to be here (I’m paying to be here!) and that’s because I really do believe that IMpower | FundForum offers the most varied and in-depth analysis of the investment and wealth markets.

Looking through the agenda, I’m excited to learn from other leaders, from investment specialists and distribution experts.

I’ve no doubt that we’ll

  • hear about the challenges everyone has faced as a result of economic slowdowns, the hangover from the pandemic and of course, the dreadful wars which are taking place.
  • get plenty predictions for the future whether it be themes, structures or facilitation.
  • not hear is anybody saying “Well, the last 12 months went exactly as expected.” (Those words have never been spoken at any investment conference!)

But I really hope that we get to address and discuss what I believe is a more deep-rooted challenge facing us – and that is, how do we stay relevant?

As a veteran(!), I remember entering the industry in 1987. Because I worked for an insurance company, I didn’t feel an active participant in the investment market even though I was, by virtue of a company pension scheme. Later, I took out a mortgage with an endowment policy, further increasing my exposure to the market, but again largely on an unconscious basis (I was still in my early 20’s).

For retail clients like me, knowledge was the preserve of the institutional investors, the stockbrokers or the more sophisticated wealth managers.

Their need and their relevance was obvious. They had training, they had operational capability and they had access. The retail investor was largely oblivious.

Since then, government intervention and regulatory change has seen a gradual shift in risk towards the individual (whether they initially appreciated it or not). Arguably, there’s even been an abdication of responsibility to some, which has resulted in an advice-gap.

The consequence of the shift – or democratisation of risk, as it’s sometimes inelegantly put – is that more and more retail investors have needed to improve their knowledge. They’ve not necessarily needed to become experts, but they’ve needed to improve their awareness and at least understand more of the language.

To support them, there’s been no shortage of new market entrants eager to provide operational capability and market access. Any of us can access markets and vehicles more easily than ever, putting the relevance of the traditional providers under threat.

This brings us to knowledge. Knowledge was perhaps the most important of the three barriers to entry. Access and operational capability were always functional. Knowledge was emotional and represented the preserve of the distinguished. Without knowledge, you’d be a fool to execute.

But nowadays, knowledge is a choice open to anyone. You can find out about anything you want very, very easily. Heart surgery, plumbing a bathroom, the technical specification of an aeroplane – it’s all there with just a couple of clicks.

Investment knowledge is no longer hidden behind the dark oak panels and leather-bound folders of the stuffy west end offices. It’s all in plain sight, ironically formed in large by the “we’re cleverer than them” marketing campaigns employed by so many investment companies.

And this is only going in one direction.

Capability, accessibility and knowledge supported by technology (whether under the coverall banner of AI or not) will make it easier and easier for the individual to take more control of their own affairs, should they choose to.

Which leaves the obvious question for everyone who’s passionate about our industry – how do we continue to be relevant?

Join Graham at IMpower | FundForum >

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