Wealth Management Industry Trends

Back in 2015, Bill Johnston, the Executive Council, and I met to develop our strategic goal for the next 10 years – Top of Mind in the state of Michigan. As we approach the end of those 10 years, I have put together a talented team of forward-thinking leaders at Greenleaf Trust to develop our strategic goal for the next 10 years. The process of strategic goal development involves both looking back in reflection as well as looking forward to emerging trends on the horizon.

As a team, we recently spent time discussing how the wealth management industry will evolve over the next 10 years and what we will need to do to adapt and continue to serve clients in the future. Of course, we started with the hottest topic right now – how will artificial intelligence (AI) impact the world? There is no question it will impact the wealth management industry. But, how and when? Will it actually replace people in our industry?

Although powerful, we are still in the early stages of generative AI development and there are imperfections. Mainly it is dependent on data quality, can be subject to biases, and doesn’t yet understand human feelings and experiences. That will all change rapidly and there will be many useful applications for our industry. It may even be transformative over time. We foresee benefits more in internal operational activities and back-office efficiencies in our business over the next 10 years. Examples could include trade processing, account opening, file auditing, asset allocation compliance, etc. We still believe relationships matter in our business and holistic wealth management requires people that truly care about those they serve and the work they do. Without being hubristic, a full understanding of what a client’s wants, needs, and desires are seems a long way off for a computer.

Another topic we spent focused time discussing was how to best serve the next generation of clients. Future clients will have different demands and needs. For example, their preferred method of communication will most likely be totally different than the preferred method of current clients. If my boys who are in their late teens and early twenties (Generation Z) could delete the phone application from their iPhone, they would. So that means the digital experience we provide our clients with will most certainly need to evolve as well. Technology enhancements will need to elevate their access to information as well as diversify the interaction options with their Greenleaf Trust team.

We believe discussions on the evolution of our industry also need to include the topics of cybersecurity, diversification of services offered, and talent. With the increased use of technology and the evolution of our digital experience comes the increase of cyber threats. Cybersecurity risk is and will continue to be the greatest risk in our industry. Our commitment to data security will need to remain strong and evolve as the “bad actors” evolve. Changing demographics will require us to continue to diversify services offered to clients in order to continue to expand our value propositions to them. Our industry is also aging, there are fewer trust banks, and the number of college students graduating in a related wealth management field is declining.

I get excited when we look to the future of our industry and the evolution of our company. We have a commitment to continuous improvement, a contempt for hubris, and a proven record over the last 25 years of being agile and adaptable to changing client needs.