Digitisation is at the heart of any future-proof business strategy, whatever the industry or sector. This is particularly the case in wealth management. As investing is a complex process, the technology requires considerable time and investment to develop and deploy.
We at The Family Office began with our digital transformation in 2018. While the output was technology-focused, the building blocks were based on many years of accumulated experience preserving and growing the wealth of high-net-worth individuals and families.
Here are some key factors that underpin our drive to explore the potential of digitisation and why we believe they are relevant to the wider market.
A New Generation of Digital Natives
A global transfer of wealth occurs every couple of decades as one generation passes the baton to the next. The Baby Boomer generation (born between 1944 and 1964) is among the largest and wealthiest in history. The upcoming transfer of wealth from the Baby Boomer generation to the X and Y generations (born from the late 1960s to the 1990s) is often called “The Great Wealth Transfer.”
Both generations that will inherit the wealth, particularly Generation Y (also known as 'Millennials'), have spent their formative years amid a degree of communication that their parents could never have imagined when they were young. And their children inhabit a reality that is even more interwoven with digital reality—via games, metaverse environments, and increasingly virtual assets.
These recipients of wealth are therefore not just more open-minded to digital innovation in wealth management but expect and demand such innovation. They expect to obtain information, make trades and withdrawals and communicate with their provider instantly. They also expect a service that is personalised, secure and transparent.
These are the success factors for a wealth management firm that intends to survive. As multigenerational guardians of client wealth, we must deliver the best experience.
Maximising Client Satisfaction and Trust
Expectations about the wealth management experience have evolved. Clients who use hybrid solutions in other sectors (such as banking or retail) also expect their wealth management firm to deliver everything digitally at the click of a button. This also means that the temporary loss of physical connection—which is not ideal, but has happened in the recent pandemic—is no longer an obstacle to continuing to receive value.
The digital platform of The Family Office offers clients at all levels a future-ready investment experience. Here are the key elements:
The new digital paradigm means that clients can receive an asset allocation strategy in minutes after answering a few questions. They can also review updates on performance and relevant market movements, and simulate risk and reward, thereby saving time and simplifying their decision-making.
Driving Results: THE FOUR 'CS' OF TRANSFORMATION SUCCESS
Digital technology is transformative for all the businesses and clients, getting it right has been a demanding process. Inspired by the four 'Cs' of diamonds (Cut, Colour, Clarity, Carat), here is the framework to succeed in digital transformation:
Commitment: If leadership is not committed, even the best ideas cannot take root. Buy-in from the company board and senior management is a prerequisite for success.
Clients: “Technology for its own sake” is a common snare. To avoid falling into it, clients’ needs must be the goal of every initiative.
Culture: Management initiates change, but the company must bring change to fruition. We must therefore ensure that the organizational culture embraces change initiatives.
Cost: Technology can increase efficiency, but it is also expensive. A proper assessment of the financial investment and benefits at the outset is preferable to a post-mortem after months of fruitless cost overruns.
Since it was founded in 2004, The Family Office has managed more than $2 billion of assets for over 200 ultra-high-net-worth individuals and families across the world through our offices in Manama and Riyadh. Our Dubai office opened in May 2022, consolidating our leading presence in the GCC.
Learn more about The Family Office here.