By Josh Book

We were so fortunate to be able to participate in the recent In|Vest Conference in New York. It was incredibly well attended – not only by executive practitioners from all corners of the wealth management category, but also by vendors with innovative digital solutions of all shapes and sizes and a cadre of consultants eager to offer a way to help. Frankly, In|Vest is a must-attend event if you participate in the wealth management space.   

The Good: Incumbents are taking action.

There seems to be a shift in the way incumbent wealth management firms are approaching modernizing their businesses. Gone this year was the “hype” around customer-facing robo-advisors and massive disruption of assets flows. Rather, firms seem to be taking a more measured and pragmatic approach to modernization through the use of digital technology. This will be great for consumers as it further legitimizes the delivery of wealth via digital technology. Let the democratization of wealth services continue!   

The Bad: Industry jargon shows a lack of consumer understanding.

While platitudes are the norm for industry conference formats, the overuse of umbrella terms has proliferated over the past few years. This year’s In|Vest conference was no exception, with many attendees using terminology that inhibits the flow of meaningful dialogue and knowledge transfer. Terms like “hybrid”, “digital”, “AI”, “robo”, “digitization”, and many more fail to provide useful descriptions of what firms are actually doing. At a high level, we can all agree that the wealth business is evolving, and that technology is the prime enabler. But when consultants make statements like “hybrid and AI will transform a business”, the language carries little in the way of real meaning. Instead, there needs to be more emphasis on clearly defined customer needs and tangible or desired behaviors, which will make it clear how such advancements in tech (conjoined with the required operating model shift) can service those needs. Beware the consultant/vendor tie-ups as they mobilize to inundate executives with proverbial “silver bullet” solutions.

The Opportunity: Unpacking the path to winners/losers.

A central conference theme was that the evolution of the wealth category is still in its early days. At this point, there are already a few losers, but no clear winners.

Appearing to be on the winning side, we see Acorns adhering to a core mission while implementing an innovative model that meaningfully gains traction and assets over time. Incumbent firms are now able to point to actual digital wealth businesses that they’ve launched which is allowing for lessons to be learned, products to be iterated and re-evaluation of customer engagement to be analyzed. On the flip side, we’ve seen a few well-funded consumer-facing digital platforms close shop recently, which drives home the point that competition for customer assets is increasingly challenging.

To date, large swaths of consumers have been ignored by the wealth management category. There is lots of opportunity still for upstarts and incumbents to find innovative ways to reach the masses and help them all make better choices for their financial futures.