Seasoned investors and wealth managers know that market volatility, economic ups and downs and external shocks are to be expected on the road to achieving long-term investment goals. But then came the once-in-a-century COVID-19 pandemic.

Fortunately, the wealth industry appears to be keeping its head.

Although the pandemic presents wealth managers with immediate challenges, the industry was already in a state of transition. Competing in the digital economy has meant that service providers have had to review how they engage with their customers and that has included the wealth management industry.

As the digital marketplace continues to mature, there is a growing expectation among investors and fund members that they should be able to receive the same level of personalised customer experiences as provided by banks, retailers and utilities.

COVID-19 has accelerated “customer-first” trends already under way which experts agree is what is needed to shepherd nervous investors and fund members through to the other side of the pandemic.

“Investors are naturally anxious in volatile markets and firms can stand out with a positive customer experience during periods of uncertainty,” says professional services firm PwC in a recent report.

“Technology will be key to enable the human touch in communications when in-person meetings aren’t advised.”

Management consulting firm McKinsey & Co agrees. A recent paper advises that the immediate challenge for wealth managers is to “sustain investor confidence … through continued engagement and communication”.

McKinsey stresses the importance of “much needed agility in the business model to ensure faster adoption of digital tools across the entire wealth-management value chain”.

“Traditional wealth managers…have an opportunity to acquire new or accelerate existing digital propositions.”

The wealth management industry is looking to scale to provide customers with the level of service they expect. As a result, funds are merging, creating a new breed of “mega funds”.

The consolidation under way means that fewer funds will be managing Australia’s retirement savings honey pot – currently $2.9 trillion and expected to grow to $5 trillion over the next decade – with industry expectations that by 2030 the superannuation sector will be dominated by 10 to 15 mega funds with each managing up to $300 billion in member funds.

Some of the customer-first trends already occurring before the coronavirus pandemic struck include:

  • Traditional administration giving way to new hybrid operating models that maximise opportunities for differentiation.
  • Super funds increasingly “value-sourcing” – sourcing components based on what delivers the best outcomes for members.
  • Technology-led services that deliver personalised experiences and better value for members.

Paul Dunn, client relations and sales director APAC for ASX-listed Bravura Solutions, which specialises in developing software for the wealth management and funds administration sectors, says funds are looking to automate their “service proposition” and modernise the member experience.

“Scalability is important not just to ensure survival in a more competitive marketplace but also to have the flexibility to break away from traditional service delivery,” he says.

Bravura’s software is used in key markets including Australia, the UK, South Africa and New Zealand. Some $4 trillion in assets are entrusted to its systems globally.

“Progressive funds are looking to leverage emerging global trends in technology and service innovations,” Dunn says. “Leveraging partners that bring a global view will be a key advantage, creating new opportunities for super funds to transform the member experience.”

Bravura has responded with its Sonata Alta proposition, which Dunn describes as ‘‘a technology-led best-of-breed operating model that delivers a true digital-first experience for members’’.

He says the wealth management and superannuation markets are “ripe for automation”. “By using technology to streamline and automate processing, funds can reduce their cost-to-serve and deliver better outcomes for members.”

In 2019, Bravura boosted its technology armoury with the acquisition of Midwinter Financial Services. The Midwinter cloud-based financial planning software powers back-office administration for financial advisers and drives online self-directed digital advice for super fund members.

“There is an opportunity for funds to differentiate themselves by providing a deeper range of integrated advice and education services,” Dunn says.

By integrating the Midwinter software into its Sonata platform, Bravura is seeking to transform the member experience, delivering an end-to-end advice capability for members.

“This is a true differentiator and will enable more relevant and engaging interactions along the member journey,” he says.

This article was featured in The Australian Financial Review on 25 May 2020

About the author

Paul Dunn


Based in Sydney, Paul Dunn has over 25 years of experience in the financial services sector – having worked for major banks, life companies and global consulting firms. He has held senior leadership roles in business development, account management, corporate consulting and operational administration. Paul is responsible for leading sales growth in the APAC region across current and future customers.

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