Asset management faces an uncertain future. The financial crisis caused a sea change in the industry that brought on new regulations and new perspectives of the industry. More than that, improved technology and changing culture have made traditional finance less attractive to many consumers. The tools, information and assets are all available at the touch of a button, so the need for brokers has decreased and the need for advisers has increased. Asset management will have to answer several important questions in the future.
What will the investor of the future look like?
The investor of the future will be quite different from today. In the future, investors will be more equally split between women and men. They will also receive and make many more decisions on mobile devices. The will need quick access and quick decision making tools for their investments. While the wealthiest investors will still have advisers to manage their assets, the vast majority of people will take the responsibility into their own hands.
How will investment advisers gain trust?
Wealth managers and investment advisers lost trust during the financial crisis. People are disenchanted with the way the industry is run and are skeptical whether investments are for the investor or to benefit the adviser. In the future, financial firms will have to build trust
the way technology firms do today. Apple, Google and Amazon are some of the most trusted firms. They provide solid, valuable products, sometimes at a loss, in order to gain trust and consumer acceptance. Financial firms must adopt these strategies in the future. Technology firm Alibaba in China has directly entered the asset management industry, raising over $90 billion.
How are institutional investors effected?
Institutional investors will have the same demands of other consumers for increased trust, better products and more technology. They will expect their financial partners to provide the latest, more effective software and management options on their funds. Institutional investors will require even greater transparency than consumers and will want to know that their partners are providing the deepest, most insightful information.
In all, the asset management industry will change rapidly over the next 10 to 15 years. Technology, changing demographics and increased expectations will have a major impact on the financial ecosystem.