Staying Relevant in a Rapidly Changing Environment

EDISON, N.J., April 10, 2025 /PRNewswire/ -- Mike Tropeano, CFA, AIF - Senior Vice President, Fi-Tek, shares his outook on a changing FinTech industry -- 

The lines are blurring. Competition is increasing. Client expectations are changing. You need to do something, now, to remain viable and grow. The wealth trust vertical has struggled to keep up with the advances in technology impacting the ability for firms to grow. According to Datos Insights, the share captured by bank trusts declined from 10% in 2016 to 7% in 2023. Making matters worse, it is expected to drop to 5% by 2035.

Assets will continue to move from retirement plans to wealth, between spouses and generations, making client acquisition and retention the greatest challenge for wealth managers. Wealth Trust organizations find themselves at a crossroads and need to rethink their ecosystems or risk becoming less viable as service providers to the broad market. What can you do to prepare yourself?

Why change? Why now?

The need to improve client engagement through personalization has become more critical because of the necessity to establish relationships earlier in the wealth life cycle. A shortage of talent is requiring firms to drive scale through workflow and the use of Artificial Intelligence where the use cases are becoming more clearly defined. The longer an organization waits to address these, and other key macro trends the more of a disadvantage they will be at.

Convergence between wealth verticals

A recent study by Will Trout of Data Insights found that approximately 60% of financial advisors now offer trust and fiduciary services. This narrows the differences between traditional wealth trust providers, RIAs, broker dealers and family offices. Further, the percentage of trust accounts at a typical trust firm is dropping. Some have reported having only 25% - 30% with significant growth in investment management and Rollover IRA accounts. This makes nearly all RIAs your direct competitor.

Need to engage investors differently

The profile of today's investors has become more varied. Traditionally, we looked solely at the level of wealth when defining the user experience. We need to also consider the differences between generations and gender. This will allow you to show you not just know the client, you understand them. It is also important to meet the client where they are with meaningful touch points to show your value.

There is also a higher demand for non-traditional asset classes. The democratization of private equity and specialty assets has increased adoption amongst high net worth and mass affluent investors. However, it has created processing and reporting challenges for some.

Need to scale your front, middle and back offices to remain competitive

The demand for wealth management services continues to grow. Firms need to attract talent and grow their workforce to service an expanding client base and deliver additional services. McKinsey estimates that by 2034, at current advisor productivity levels, the advisor workforce will decline to the point where the industry faces a shortage of roughly 100,000 advisors. This number grows substantially when you consider the impact on operational and other support areas.

Moving forward to meet the needs of tomorrow

If you do not accept the magnitude of change in today's environment and acknowledge the need to transform, you create greater problems for our organizations. Your digital transformation cannot be just a lift and shift of a potentially broken or inefficient process, it must be transformative and drive simplification. Even when considering moving to outsourcing or changing providers to improve scale, the migration has to include redefining processes.

Going it alone is not practical or wise and can be costly. Developing a strong plan will lead to the roadmap for success.

Check in on your ecosystem

During their annual wealth tech survey, Orion found two of the largest technology pain points were disconnected solutions and cost. Clearly, that is a good place to start, however, not where it should end. You need to consider their strategy, openness of each component and if they have a clear strategy to integrating AI. Depending on how your partners address these issues could impede scale, force manual processing and increase your costs. The approach to APIs is changing. Factors such as timing of data, method of connection and how information is delivered are shifting. Does your partner have a plan to meet the needs of the future?

As business lines converge, there is a natural overlapping of functionality especially in the front office. This can negatively impact scale and consistency in the client experience. The natural reaction would be to eliminate the application least used. It may not be as easy as that in determining the end state. Addressing regulatory needs, integration across your platform and functionality will start the discussion. The long-term strategy of your partner and openness of the architecture will assist in completing the analysis.

Evaluate the new competitive landscape

A competitive analysis starts with your primary market and geography. Times are changing. The makeup of your target client and who can service them is expanding. As a result, you need to expand the breadth of your research. The review should include non-traditional competitors and organizations that can legally do business within your geography. These firms can be large brokerage firms, small independent RIAs and everything in between.

Organizations differentiate themselves through service model and depth of relationships. This cannot be demonstrated until you win the relationship. Develop an understanding of what your competitors offer for their client experience, going beyond the online and mobile applications. Consider where friction exists in your process versus theirs. Identify any product or service gaps.

Reset your strategy

Nearly all internal and external factors are changing. Are you? Typically, organizations go through a strategic planning exercise every year. The focus tends to be on just the next year or two. Firms would be better served by, first looking back at the past to identify the drivers to success and failure of the past plans. History tends to repeat itself unless we prevent it. This can be especially if we do not truly transform. The next step is to look at where you need to be in 3 – 5 years and work backwards on how you get there. Set realistic goals on how you can improve your front, middle and back office. Making their jobs easier will have a positive impact on the client experience. Develop the tools for a multichannel client engagement strategy and become persona driven in how you define the client experience. Lastly, avoid being tactical to reach a short-term goal, look long term, identify the steps to get there and define your roadmap to success.

About Fi-Tek, LLC

Fi-Tek is a leading FinTech company providing technology solutions to wealth management, family office and alternative investment market segments with its integrated GlobalWealthES (GWES) product, supporting a diverse client base consisting of global private banks, trust banks, broker/dealers, family offices, and RIAs. Fi-Tek has further enhanced its core GWES technology platform with cloud native purpose-based apps for advisors, executives and administration personnel for a 360-degree view of clients, as well as driving digital transformation across its client base. This would also enable better integration and data exchange with large financial institutions with presence in the Cloud. For more information, visit https://www.fi-tek.com.

Media Contacts
Arpita Chatterjee
Director of Marketing and Strategic Alliance, Fi-Tek
732-632-8167
[email protected]

SOURCE Fi-Tek LLC