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James Klempster, manager of multi-asset portfolios for Momentum Global Investment Management said the fundamental changes occurring in the wealth management space will force many wealth managers and advisers to review their business models and make significant structural changes.
In a paper published today (9 July), Momentum highlighted the changing wealth management landscape and the opportunities arising from the changes, whereby many wealth managers are looking to outsource non-core services.
The research found that:
· Wealth managers and advisers will need to undertake a full review of their proposition to ensure they provide value-added, cost effective advice.
· The change from trail to a fee-based model has huge ramifications on the client proposition and managing this will be crucial for businesses to be successful.
· Strategic partnerships will become increasingly important to enable wealth managers and advisers to offer a competitive edge while maintaining their focus on clients.
· Mergers and acquisitions will be widespread as firms look to manage costs and increase efficiency.
· Doing nothing and hoping RDR will go away is not an option.
Mr Klempster added: “There appears to be a huge spread in terms of wealth managers and how they are approaching the RDR conundrum. As with most things in life, change brings opportunity and there will be a large polarisation between firms who embrace the change and set themselves up for the future and those who think life will carry on as normal with minimal change to the status quo.”
The paper concluded that for the wealth managers who embrace the changes and enhance their business models to make the most of in-house and external resources, opportunities will be extensive, for those who don’t, the future may be very different.