Capitalizing on wealth management trends

Capitalizing on wealth management trends

Wealth management is increasingly competitive, and client expectations are rising. To be successful, firms need to have a genuine interest in helping the people they serve. As such, financial professionals need to stay abreast with market and technological trends in wealth management.

This interview was published in Fintech Global’s WealthTech100 2023 report. To read this special feature on Croesus, click here.

“To remain relevant, wealth management firms need to know what is coming next. A firm working in a silo and reluctant to embrace change will not have success going forward,” said Annie Sinigagliese, a wealth management, compliance, and regulation expert.

Over the years, Sinigagliese has held a number of senior positions with such prominent institutions as the Investment Industry Association of Canada (IIAC), National Bank Independent Network (NBIN), Brockhouse & Cooper, and the Montréal Exchange (TMX Group). As VP and Chief Product Officer at Croesus, she is now responsible for the WealthTech product strategy.

Generational shift in wealth

One of the core trends Sinigagliese sees in the current market is intergenerational wealth transfer and its impact on the sector.

“Younger investors have a different view about wealth, the investments and products they want to hold in their portfolios, how wealth should be managed, and the use of technology.”

One of the areas the new generation is eager for is ESG assets. A recent study by Inyova found that 86% of millennials are interested in impact investing and are twice as likely as others to invest in funds targeting social or environmental causes.

They are also more willing to take risks. The proliferation of cryptocurrency and digital assets is a testament to that. But it does mean that the wealth management industry has a role to play in ensuring that individuals are supported so they are not exposed to excessive risk.

“It clearly signals that wealth management firms, advisors, and portfolio managers, as well as regulators and governments, must educate investors. There is a true need to improve financial literacy. Investors must understand before investing in a new product.”

Alternative investments, private equity, and direct indexing investment strategies are also trending in the industry.

Human-centric services with or without tech

Younger generations are more open to changing how they interact with wealth management solutions. Yet the needs and wants of investors remain diverse.

“Some investors want human advice, some want to manage their wealth through digital tools, some want both human and digital. No matter what the preferences are, one thing remains the same: It must all be simple and user-friendly. The popularity of superapps in Asia is proof of that.”

The rise of superapps is slowly expanding outside of Asia. A study by PayPal reports that 72% of consumers in Australia, Germany, the UK, and the US are interested in these types of platforms.

This is not likely to reassure certain traditional wealth management firms and banks that are already operating in an increasingly competitive environment. With the rise of superapps and the increasing ease of implementing new investing tools, companies that would not have previously entered the traditional wealth management space are now doing so by competing for investable assets. These new competitors are in addition to new digital investing platforms such as Robinhood.

The rise of female investors

One change that Sinigagliese would like to see is greater moves to serve the needs of women, a market segment that is still underserved in her view.

“There is a wonderful opportunity for wealth management firms to attract women, not only as clients, but also as advisors and portfolio managers. Serving women is fundamentally about listening, understanding needs and goals, and explaining processes. It is not about ‘selling’ them a big return.”

Talent retention in a competitive world

In addition, retention of talent is one of the biggest challenges firms will face over the coming years, said Sinigagliese. This is due to a shortage of skills. Many advisors and portfolio managers are now retiring, and talent is being tempted by competitors that offer more innovative benefits. To combat this, firms will need to rethink their offering to employees.

“Two items that are top of mind for me are the working conditions and technologies firms offer their employees. Providing flexible working arrangements, such as remote work and work-life balance, is a way that employees will feel supported by their employer to focus on providing excellent client experience to investors. Firms must also provide new technologies that support advisors, portfolio managers, compliance experts, and all employees, to simplify everyone’s life.”

In this context, WealthTechs must create solutions that are highly scalable and connected, to keep up with the fast-paced evolution of the sector.

Technology trends

The migration of infrastructure and technologies to the cloud, greater usage of artificial intelligence and machine learning, rising adoption of system integration through APIs, and open technology infrastructure are key trends that Sinigagliese sees.

She also highlighted artificial intelligence being used in investment decision-making through advanced analytics, and in portfolio rebalancing. Indeed, the technology is already used to manage investments and portfolios. It is also used for business planning purposes, such as understanding how a firm operates, identifying areas of improvement, and recognizing optimal decisions, Sinigagliese noted. Other use cases for the technology include compliance and identifying fraudulent activity.

Croesus’s role in supporting the industry

Croesus is a Canadian WealthTech that offers wealth solutions, including a portfolio management system, centralised portfolio rebalancing tools, and APIs for better inter-platform integration.

Croesus plays an active role in innovation, notably through its innovation laboratory, Croesus Lab. For example, Croesus Lab is currently working with natural language processing (NLP) to enhance the use of its wealth management solutions by creating summaries that can easily be communicated to investors.

Croesus is enthusiastic about using technology to make platforms the best they can be. The goal is to turn “complex and sophisticated” business operations into “simple and easy” activities. This applies to internal processes that must be streamlined, to the seamless integration of systems into a single holistic platform, and to having technology that goes beyond automating time-consuming tasks. Together, this allows investment advisors and portfolio managers to better serve their clients.

A fundamental part of Croesus’s mantra is “rethinking the why behind every action.” As much as its solutions are valued by its clients and users, Croesus is always looking to improve these solutions and make them even simpler for the end user. For example, if a professional performs a recurring task, Croesus will try to automate it.

With its notion of “simple and easy,” Croesus is transforming how wealth management professionals work. Its automated rebalancing tool, Croesus Central, can rebalance thousands of portfolios at once. This solution, which also includes modelling, tax optimisation and compliance monitoring, saves companies significant time and money.

Embracing the idea that success comes through collaboration, Croesus works with partners to enhance its solutions and foster integration between systems and data sources. The technology will be designed as a set of modules, allowing companies to take and use what they need.

“Collaboration brings forth more innovation and a better product offering,” said Sinigagliese.

She concluded, “Firms should rethink wealth management as a whole. I believe success in the future will also come when trust, reputation, and credibility are consistent in all business aspects.”

About Annie Sinigagliese

Annie Sinigagliese is a chartered professional accountant by trade. She worked for the regulatory division of the Montreal Exchange, performing financial, business conduct, and trading desk review of investment dealers and brokerage firms.

Over the years, she acquired extensive knowledge of wealth management, compliance and regulation, and the effective management of brokerage firms. This eventually led her to become the managing director of an industry association, where she spearheaded industry committees on innovation, technology, and compliance, while lobbying regulators and government officials.

In 2022, she was ready to start the next chapter and joined the Canadian wealth management solutions developer Croesus. With deep knowledge and experience in wealth management, Sinigagliese believes that success in wealth management is defined by three areas: trust, collaboration, and a desire to help.

She stated, “I am lucky to have worked with people that are team players and believe in collaboration. When working in an environment where everyone is there for each other, success comes and so does fun at work.”

“I believe success in business is about caring. It is not about the numbers (even if numbers remain important).” Adding to that, Sinigagliese said firms should have a genuine interest in helping people, whether it’s WealthTechs helping wealth management firms, wealth management firms helping their employees, or advisors and portfolio managers helping investors reach their financial goals.


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