Wealth management in 2030

Wealth management in 2030

In this interview published by Paperjam on 17 February, Sophie Braibant discusses how personalisation, security and wealth transfer will shape the industry’s future. She also highlights the pivotal role of innovation and artificial intelligence in retooling professional practices and the overall client experience.

How do you envisage wealth management evolving by 2030?

It will become even more bespoke in the years ahead. Our clients are increasingly attentive to the fact that their investments should reflect their personal values and objectives. In the UHNWI segment, products and services will need to become increasingly tailored and specialised.

Inevitably it will still centre on people. Private banking remains a relationship-driven business, built on personal interaction and trust that develops over time.

Lastly, I believe security is a major strategic issue, and one whose importance will increase significantly. In light of the surge in fraud cases, the growing sophistication of fraudsters and the rising number of cyberattacks, clients will increasingly turn to banks that can safeguard their assets and protect the confidentiality of their data.

What will drive this new era of wealth management in the coming years?

The transition, in many respects. First and foremost is the massive transfer of wealth from one generation to the next. Over the next four years, an estimated USD 15 to 18 trillion is expected to be transferred intergenerationally. Never before will such a huge amount of assets have been passed on in such a short space of time.

There will also be a handover from older to younger generations of bankers. Building a client portfolio requires experience, the right contacts and an opportunity to prove yourself in times good and bad. Many successful bankers in Luxembourg with well-established client portfolios are approaching retirement. One of the challenges facing private banks is ensuring that the next generation of relationship managers can build trust and provide reassurance, not simply offer innovation. At the same time, this generational shift will bring us closer to the expectations and needs of the next generation of clients.

Lastly, AI will mark an unprecedented turning point, enabling us to reinvent the professions within wealth management. Certain roles will disappear, new ones will emerge, and many will be reshaped. We therefore need to avoid a disconnect between career paths shaped before AI and those emerging in the post-AI era.

How is the operational revamp helping to support changes in wealth advisory services?

Operations is an area that is often overlooked in a bank. Extremely high standards are expected across all business lines. The slightest mistake is visible, delays are quickly noticed, and recognition tends to be rare. When operations run smoothly, they are taken for granted. But when something does go wrong, everyone notices. Yet this remains a highly technical area, with far more moving parts than may appear from the outside, in which innovation still has a vital role to play.

In many private banks, a significant number of processes are still performed manually, as the cost of developing IT solutions is difficult to justify economically. Without a shadow of a doubt, AI will redefine these roles and go a long way towards optimising their processes, leading to smoother interactions. This will also help minimise errors and improve the overall experience for clients and bankers alike.