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  • The COVID-19 epidemic has brought a great deal to a standstill. From empty offices to economic stagnation, the current crisis has pressed pause on life as we know it.

    In the face of such uncertainty, the wealth management sector – often criticised for its slow-reaction times – has been quick to adapt to the new reality, with 33% of wealth management firms increasing resources invested in digital tools as part of their response to the crisis, more than any other group of professionals during the pandemic.

    As lockdown begins to ease, when it comes to wealth management there isn’t going to be a reversion to the status-quo, with many of these changes here to stay. However, it remains to be seen which changes are likely to remain permanent, who will adapt to take advantage of these new circumstances and what the long-term impact is going to be.

    Certainly, working from home has shone a spotlight on the glaring inefficiencies in many of the manual procedures many firms still rely on. These may seem small in their significance, but they create bottlenecks that reduce overall client service. For example, we know that some of our clients have previously been heavily reliant on paper for some processes such as onboarding and often still require wet signatures for documentation. During lockdown, in many cases this has been replaced with Docu-Sign capabilities. While many firms have had this on the agenda for months or years, it has taken the current crisis to provide the impetus to make the change.

    Small but significant changes like these will be a catalyst for wealth managers to assess their operational efficiencies across the board. Coronavirus has not just highlighted inefficient processes but the inefficient placement of resources within firms. The COVID-19 induced drive towards technology and automation has in turn revealed processes and functions that they believed only people could do, allowing wealth managers to place their human resources where they are most beneficial. With constant pressure on margins, the wealth managers who will thrive in the post-coronavirus landscape will be those who are able to produce the best hybrid model that combines human talent with automation (from AI to robotics) in the right places.

    In a similar way, the need to connect remotely during lockdown is set to have a huge ripple effect on how things are done. This is important for internal meetings, but the real impact here will be on external meetings with clients. Many have argued that, with wealth management being so relationship driven, face-to-face meetings will always be the bread and butter of the sector.

    Yet, what we have seen is that video calling allows the personal touch so crucial to the sector, but it does so in a way that is much more efficient. Face-to-face meetings take up a lot of time, meaning that they are often few and far between. This may have been suitable for the old guard, but this new COVID-19 generation of tech-savvy end-investors characterised by an appetite for the instant care less about being wined and dined, and more about being frequently updated as to the status of their portfolio. The question of ‘where shall we go for lunch?’ is fast becoming ‘how are you are managing my money in the best way for me?’

    Wealth managers that fail to capture the frequency, convenience and speed of communication that clients have now come to expect will not only struggle to satisfy existing customers, but to generate new inflows. Those that allow the prescribed conditions of lockdown to influence how they adapt and innovate will be winning the battle for new business in a post-lockdown environment.

    It is fair to say that the wealth management firm of 2021 is going to be very different than the one of 2020 pre-lockdown. To succeed in this new normal, it’s not just about embracing technology, but identifying how to integrate it to drive efficiencies, reduce costs and maintain the personal level of service clients and prospects expect whilst adapting to the environment we now find ourselves in.

    Wealth managers have been struggling for many years about how to equip themselves to meet the needs of the next generation of high net worth individuals; COVID-19 has simply been the catalyst that no one expected to turn this debate into reality. Wealth managers that fail to adapt will be left in lockdown; those that have will be thriving in this new normal and future proofing their businesses for whatever 2021 has in store.