Third annual study uncovers the investment decisions and practical realities wealth firms face during transformation.

Digital Transformation: Wealth managers must move fast to stay relevant

Chief Operating Officer, Canadian Wealth Manager

Leaders say

Firms need to attract and retain a diverse network of advisors, and offer them cutting edge technology to service emerging client needs and expectations.

Competitive dynamics, cost pressures increase the urgency for transformation

“Our main focus is to lift and shift our legacy systems to entirely cloud based infrastructure and break down the silos between departments for business optimization and cost reduction.”

New client segments demand a personalized, digital CX that is high tech and smart. They want greater service availability and access to expanding asset classes including ESG, alternatives, and direct indexing.

To stay relevant and competitive, firms need to find operational efficiencies and reinvent themselves.

The C-suite sees a digital future

Digital transformation is the top strategic priority for many wealth firms. Despite economic headwinds, they are ramping up investment to stay competitive as industry dynamics evolve.

The pace of transformation is accelerating

Head of Business Unit, US Wealth Manager

“Development of an AI-based predictive algorithm capable of suggesting wealth management techniques based on past behavior of customers would be most important for us, as it would help us offer better investment advice to our clients.”

CEO, US Broker Dealer

“We can onboard customers to new products completely digitally with minimal human intervention and automatic straight through processing in generation of documents and approval, the whole thing, making the process as quick and effective as possible.”

CTO, US Digital Broker

“Over the next five years, our focus will be on extensive automation and near-real-time analysis of customer data.”

Firms classed as Leaders in our maturity framework are increasing spend on next-gen technologies and prioritizing Data Analysis/Visualization, Cybersecurity, Cloud and AI for investment.

Wealth Leaders prioritizing spend on next-gen technologies

of respondents say it is now their most important strategic initiative

of IT budgets now allocated to digital transformation – up from 11% last year

Top benefits from digital transformation

Metaverse

Wealth firms are seeing tangible benefits from transformation and next-gen technologies, with a positive impact on their customers.

Measuring success

Enhancing advisor productivity and operational efficiency

Business growth and innovation are driven by modernized technology platforms

Gather and integrate all data across the firm

of Leaders are at an advanced stage of implementing next-gen technologies such as AI

think the industry will modernize its tech stack before we land a human on Mars

AI and data are key to unlocking gains: if executives had a magic wand to accelerate transformation, they said they would:

Firms are placing a strong focus on replacing legacy technology solutions with modern, componentized, and cloud-based platforms. This enables them to drive advisor revenue, retention and productivity, personalize the investor experience, and digitize enterprise operations, all while delivering cost efficiencies. It also provides a foundation for innovating with technologies such as AI.

Leaders are increasing investment across technologies

Percentage point increase in investment planned over next 2 years

AI

Cloud platforms and applications

Cybersecurity

Data analysis/ visualization

%

Forward-thinking wealth firms are implementing innovative front to back office wealth platforms based on open architectures and a suite of component solutions they can build upon, with a consistent CX, as business needs evolve. Shared industry components can include advisor workstations, advisor marketing tools, credit & lending, fee & commission tracking, operations and reporting, integrated into a cloud-based, API-powered architecture with a common data fabric. This allows firms to modernize on their terms. They also unlock data & productivity, reduce costs and help to manage risk.

Flexible wealth platforms drive front to back office transformation

While 78 percent of investors want companies to improve their customer experience, many firms are still struggling to deliver a seamless and personalized digital experience across the customer journey.

Client-first focus

Investors seeking a seamless experience

Firms are reimagining investor communications by offering a holistic digital experience, making it easier for investors to consume and better understand account details, while providing advisors with new opportunities to reinforce their value and communicate directly with their clients.

Holistic digital client experiences

What steps are Digital Leaders in wealth taking to accelerate transformation?

At Broadridge we are shaping the next generation of wealth management by empowering firms to better navigate a constantly changing industry. The Broadridge Wealth Platform, our open-architected ecosystem of solutions, helps our clients modernize their tech stacks to drive business growth, increase advisor productivity, improve investor experiences, and digitize operations. With over 50 years of partnering with thousands of clients to reinvent wealth technologies, we have the proven track record to help you push the boundaries of what’s next.

Together we are pushing the boundaries of what’s possible

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Increasing spending on next-gen tech by 26% in the next two years vs. 19% for Non-leaders

Three times more likely to have advanced integrated data platforms across business departments

At an advanced stage of replacing legacy systems with modern cloud-based platforms

Six times more likely to be at the advanced stages of applying AI and other emerging technologies

We interviewed C-suite executives and direct reports in business and technology roles from 115 wealth managers and digital brokers across North America, EMEA, and APAC to understand the progress they've made with digital transformation, the challenges they face, and their plans for the future.

We categorized firms as Leaders or Non-leaders based on how advanced they are in the most essential aspects of digital transformation. This includes their innovation culture, use of emerging technologies, modern IT infrastructure, seamless customer experience (CX), internal skill-building, and adoption of security and privacy protocols. This report provides practical guidance on how executives are investing and what firms classed as Digital Leaders do differently to accelerate transformation.

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Dramatically expand the use of AI and automation across the enterprise

Break down silos between business departments

Real-world applications

What defines a Leader

Real-world applications

Customer retention

Cost savings

Greater business agility

Explore the data Click each topic (right) to compare Leader and Non-leader responses

Leaders

39 %

Non-leaders

6 %

Increasing spending on next-gen tech by 26% in the next two years vs. 19% for Non-leaders

Three times more likely to have advanced integrated data platforms across business departments

At an advanced stage of replacing legacy systems with modern cloud-based platforms

Six times more likely to be at the advanced stages of applying AI and other emerging technologies

Leaders

74 %

Non-leaders

17 %

Increasing spending on next-gen tech by 26% in the next two years vs. 19% for Non-leaders

Three times more likely to have advanced integrated data platforms across business departments

At an advanced stage of replacing legacy systems with modern cloud-based platforms

Leaders

65 %

Non-leaders

19 %

Six times more likely to be at the advanced stages of applying AI and other emerging technologies

Increasing spending on next-gen tech by 26% in the next two years vs. 19% for Non-leaders

Three times more likely to have advanced integrated data platforms across business departments

Leaders

26 %

Non-leaders

19 %

At an advanced stage of replacing legacy systems with modern cloud-based platforms

Six times more likely to be at the advanced stages of applying AI and other emerging technologies

Increasing spending on next-gen tech by 26% in the next two years vs. 19% for Non-leaders

Three times more likely to have advanced integrated data platforms across business departments

At an advanced stage of replacing legacy systems with modern cloud-based platforms

Six times more likely to be at the advanced stages of applying AI and other emerging technologies

AI and data analytics are now helping financial advisors and wealth managers to identify clients that need additional solutions, customers at risk of attrition, and growth opportunities within their book of business. These solutions calculate the statistical probability of customer churn and recommend personalized actions for each case. Mining investor data in this way can generate actions that an advisor can take to successfully secure and grow their practice and engage with their clients more meaningfully.

AI tools improve customer retention

of firms classed as Leaders are at an advanced stage of delivering a seamless digital experience across the customer journey

of investors want companies to improve the customer experience

Wealth firms are using AI and machine learning to deliver topical insights and resources to advisors and create personal connections with investors through cognitive marketing solutions. While delighting clients and driving top line growth, these digital tools can also boost advisor productivity and retention. They can automatically identify prospect fit, interest level, and engagement activity. Built-in artificial intelligence automatically selects the best content to send to each prospect at just the right time so advisors can prioritize their time more effectively.

Personalized marketing through machine learning