Global ‘megatrends’ and evolving client expectations are giving rise to an interconnected system of personalisation, transparency and technology, requiring wealth managers to “dramatically rethink” how they deliver services, according to a new report from MSCI.

MSCI identified four megatrends: transformative technologies, environment and resources, heath and healthcare, and society and lifestyle, which were resulting in three broad trends capable of “completely altering” the wealth management industry.

Personalisation

The first broad trend was personalisation, with MSCI noting that personalisation in wealth management was usually for select high net worth clients prior to technological advancements, and wealth managers can increasingly offer bespoke portfolios to a broader client base.

Furthermore, clients now expect customised portfolios that reflect their individual financial goals, risk tolerance, and values.

MSCI’s survey found that demand for investment preferences was a driver towards greater personalisation among 73 per cent of wealth professionals, while 67 per cent cited tax optimisation as a catalyst and 56 per cent highlighted embedded capital gains.

Despite this, the report stated that many wealth managers struggle to balance bespoke services with operational efficiency, especially when scaling across a larger client base.

Transparency

MSCI also found that clients were increasingly keen to make sure their portfolios aligned with their personal values, rather than solely being focused on returns.

Transparency in the current environment therefore involved analysis showing that client investment preferences had been implemented as they requested, requiring wealth managers to go beyond traditional investment information to provide greater visibility into what their clients’ money is funding in both public and private markets.

The report showed that wealth managers in the EMEA and APAC regions were significantly more focused on incorporating private assets into client portfolios than in the US, amid rising client demand for diversified and non-traditional investments.

Technology

The third broad trend highlighted in the report was technology, which enabled wealth managers to collect, analyse and act upon the data needed to deliver personalised services at scale.

MSCI added that technology equips advisers with new levels of transparency to do a deep dive into client portfolio compositions, performance metrics, and impact assessments.

However, MSCI said that its survey results identified a significant barrier: “Wealth managers recognise the potential of technology but find existing tools insufficient to meet client expectations,” the report stated.

“This dynamic creates a critical need for platforms that simplify operations, offer user-friendly interfaces and enable efficient integration across portfolio management processes.”

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