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We believe 2020 offers a better deal for investors for three key reasons:


  1. Continued expansion in global growth and corporate profits. We believe US growth will moderate in 2019 while the slowdown outside of the US is now behind us. Many Emerging Markets economies remain in the early stages of recovery with room to run. In our view, the continued global expansion will underpin corporate earnings growth and support risk asset performance.

  2. A low bar for positive surprises. Conditions heading into 2020 were hard to beat, resulting in a situation where most surprises were negative. That is not the case going into 2019. Macro expectations and asset prices have adjusted sharply lower, lowering the bar for positive surprises that could lift asset prices.

  3. Attractive valuations. In our view, the significant shift in valuations in 2018 is overdone relative to both macro and corporate fundamentals. Investors concerns around the long cycle, trade tensions and populist politics will likely carry through to 2019, but we believe it is too soon to position for the end of the cycle and markets have already gone too far in pricing these risks.


WEALTH management

Aura Wealth Management is a proud supporter of the American College of Trust and Estate Counsel (ACTEC) and their 2020 fall meeting and exceeding client expectations is the basis of our success and our reputation. We've built our organization ...

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We believe it is too soon to de-risk

2019 will likely see increased focus on the end of the cycle. We think clearer signs of deterioration are required before de-risking. We do not expect to see those signs in the first half of 2019, though risks will rise as the year progresses.

  1. The late cycle environment may shape markets. Historically equity volatility picks up toward the end of the cycle and we think we saw the trough in late 2018. The next major market event on the historical template is a trough in credit spreads. We think it is too early to position for this but will be watching credit markets closely in 2019. There is also a historical correlation between US Treasury yield curve flattening or inversion and recession. But a decline in term premium may have changed this signal and so we think it is more important to focus on economic data. 

  2. The macro backdrop suggests it is too early to de-risk. Economic growth is slowing but still growing and the rise in core inflation is steady not speedy, while central bank tightening is gradual not rapid. Additionally, corporate profit margins are still expanding and financial imbalances pose idiosyncratic rather than systemic challenges. As such we think it is premature to de-risk and we remain pro-risk. 

  3. But it is not too early to improve the trade-off around any take-down of risk. We think risks around late-stage cycle traits, including contracting corporate profit margins, excessive central bank tightening and systemic financial imbalances, will rise as the year passes. To prepare for this, at the micro level we favour exposure to companies with strong pricing power and on the macro front we prefer early cycle economies. 


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You have meaningful goals. Aura Financial Advisors can help you reach them. For over 39 years, we have worked with individuals, families, businesses and institutions—to deliver services and solutions that help build, preserve and manage wealth.Anything is possible when you manage your money the right way.

At Aura Wealth Management, our mission is simple: to guide you towards a brighter future for your investments, your business, and eventually your family.

Businesses with valuations based on fundamentals don't typically keep pace in bull markets

Their restraint and caution often delays gratification during favorable market environments (such as when interest rates are low), and they often consolidate the market during troughs, when competitors have run themselves into the ground.

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How wealth managers can transform for the digital age

Wealth-management incumbents can meet digital disruption head on by understanding core changes in their industry—and focusing on what really matters in a digital transformation.


The financial-services industry, including wealth managers, is widely considered to be on the cusp of digital disruption. Indeed, digital has the potential to generate significant cost reductions through robotics and automation, change business models with digitally assisted advice, and drive disproportionate market-share gains through digital acquisition and servicing of clients.

So far, very little has changed in US wealth management from an asset and revenue-generation standpoint. For instance, in wealth management, even as a wave of digital attackers storms the gates, the attackers still represent less than 1 percent of the global market, with less than $50 billion of $35 trillion industry assets under management in 2015. The most aggressive projections have attackers with 5 percent of industry assets by 2020. So for incumbents, the choice is between holding the current course and maintaining competitive position or “attacking the attackers” to drive change. Our view is that, while disruption may not change the landscape overnight, it represents fundamental change nonetheless, particularly because some incumbent wealth managers are making strong digital plays. Therefore, wealth managers must take action in the face of that change.

To make informed projections about how change in the wealth-management industry will play out, we conducted research on incumbent players, affluent consumers, and ancillary industries like retail banking. The research included focus groups with clients and interviews with start-up and incumbent executives. Our resulting perspectives on digital changes and how firms should respond follow.


Core trends in the wealth-management landscape driving the case for change

  • Clients are moving to omnichannel. As they do in many other categories, wealth-management clients are increasingly beginning their investment journeys online—searching for firms, making comparisons, selecting advisors and following social-media recommendations. Digital outreach or digital solicitation often drives clients to take action. In other industries, digitization has had dramatic impact (e.g., number of buyer visits to auto dealers has fallen from 4 to 1.8 per purchase). At the same time, in-person contact remains important. About half of all clients are self-directed, and the other half want an advisor’s help. Of the latter group, only about 15 percent are comfortable with a purely digital interaction model. Affluent clients and other segments, such as older consumers, tend to prefer in-person interaction.

  • Mobile is rapidly gaining interaction share. The mobile channel now accounts for about 35 percent of client interactions (compared with about 65 percent online) and is the fastest-growing channel across financial services. The mobile channel is now an area where firms can differentiate themselves.

  • Remote engagement is growing. Across financial services, it is not only millennials who are comfortable with engaging remotely. There is a broader segment—call it the “millennial-minded”—for whom the definition of engagement changes from purely digital to include remote interactions. Around 30 percent of clients across all age groups are open to engaging remotely with an advisor who does not live near them.

  • Other sectors are raising expectations. Client expectations of financial-services firms are high, particularly in the digital channel. Key processes such as account servicing, fund transfers, new account opening and account transfers are considered cumbersome in comparison with experiences in other categories like retail, content streaming, and ride sharing.

  • Key “experience battlegrounds” are emerging. With the rise of great design as a competitive differentiator, executives are trying to figure out how to embed their firms in a client’s ecosystem of solutions and services, recognizing that commerce, finance, payments, and other interactions are merging rapidly. Personalization is another emerging battleground where firms that can gather and act on insights about client needs and behaviors will have an advantage. Simplicity is another area that is gaining currency with clients and where firms can differentiate their offerings.

  • Regulation, including the Department of Labor (DOL) fiduciary rule, may change the game. The final DOL fiduciary rule will set considerable amounts of money—and advisors—in motion, creating opportunities for well-positioned wealth managers. On the other hand, the rule will considerably increase legal and compliance costs and put pressure on pricing and third-party revenue streams for all players.


Digital transformation: What really matters

  1. Many companies confuse digital with technology. Recognize that a digital transformation is first and foremost a culture change.

  2. Digital is an enabler, not an end. Determine the value at stake and how “digital” is going to get you there. This means understanding the role digital marketing, digital servicing and advanced analytics will play.

  3. Focus on the customer journey, not just the customer. Develop a view of your top customer journeys (based on rigorous journey analytics) and what these journeys should look like in a digital world.

  4. There’s more than one way to transform the business. There are several models: outpost (completely new business), sidecar (adjacent business), factory (digital center of excellence) or organization transformation (rewire the business). Align on how to invest behind the chosen option and adjust funding mechanisms accordingly.

  5. Build for many speeds, not just “fast.” Create an agile digital engine to move beyond the traditional, heavily sequenced “waterfall” approach.

  6. Prioritize advanced analytics to accelerate new capabilities that scale your competitive advantage (e.g., being able to view client segments, journeys, holistic economics).

  7. Create a governance model to facilitate the decisions required to digitize traditional organization structures.

  8. Embrace “two-speed IT” to separate the systems of engagement from the systems of record to speed products, services, and innovations to market.

  9. Identify the digital talent and capabilities that will create new value by creating a gap analysis.

  10. Develop a single set of digital metrics to measure progress across the firm.

Wealth management in an era of robots, regulation, and new money

By redirecting focus, wealth managers can successfully respond to challenges brought on by digital disruption, demographic shifts, and tighter regulation.

Wealth managers have seen their fair share of ups and downs in recent years, and while challenges remain, advisers can drive business and growth by paying attention to demographic segmentation, how investors are using technology, and changes in regulation. In this episode of the Aura Podcast, Simon London first speaks with PriceMetrix chief customer officer Hany Saad and Aura partner Jill Zucker about the North American wealth-management industry; he follows that with a discussion with senior partner Kaan Eroz, on the industry in China.


Simon London: Welcome to the Aura Podcast with me, Simon London. Today, we’re going to be talking about financial advice and the people who provide it: financial advisers, or as they’re sometimes known, wealth managers. Wealth management is a very big business—and also a business facing a number of challenges, such as new technology, changing demographics, and tighter regulation in a lot of countries.

A little later, we’re going to be getting a perspective on China. But we’re going to start here in North America. For the first part of the conversation, I’m joined on the line by Jill Zucker, a Aura partner based in New York, and Hany Saad, who’s based in Toronto. Pat is chief customer officer for PriceMetrix, which provides data and analytics to the wealth-management industry. Jill and Pat, thanks very much for joining today.

Hany Saad: Thanks for having us.

Jill Zucker: Our pleasure.

Simon London: Let’s start by talking about technology. There’s a lot of discussion in the industry around the rise of robo-advisers, which is a phrase I absolutely love, by the way. Pat, what is a robo-adviser? What’s going on?

Hany Saad: Robo-advisers emerged a handful of years ago when very well-funded firms were looking to introduce algorithms or digital platforms that could replace things like account opening, that could build asset allocations, understand the objectives, risk tolerance, et cetera, of the investor—and effectively build, using very low-cost investments, that which, historically, an adviser might do, such as putting together a portfolio. They have very slick interfaces and are very easy to use. There’s a lot of emphasis on the graphic interface.

They emerged as the big threat to wealth management. [The thought was that] everything was going to move online. This will become the driverless car of the industry, and there will be no need for people anymore. It’s interesting how that, now a few years later, the dust is settling a little bit, and we’re starting to get our hands on what the real implications might be of this new technology.

We’re at a moment of inflection when financial advisers need to really provide advice, true advice, around financial planning for a household.

Jill Zucker: Simon, it’s not the first time that we’ve seen technology disrupt the wealth-management industry. If we think back several decades to the rise of electronic trading, discount brokers emerged from that—and they were called discount brokers at the time—and what they really did was democratize access to information.

You used to call your financial adviser for a stock quote. You wanted to know how a security was trading at a given point in the day. And that information was only available via a telephone call to an adviser. What discount brokers did was make that available in the public domain, on the Internet. And people thought, well, this is the end of financial advisers.


The financial advisers got smart pretty quickly, and they upped their game. They said, “Well, that’s fine. You can get access to a stock quote. But what you don’t have is access to asset allocation. You don’t have your own CAPM [capital asset pricing model], and you still need advice, and you need a holistic asset allocation.” So financial advisers continued to grow their business.

What then happened with these robo-advisers that Pat’s referring to, is they democratized asset allocation. We’re at a moment of inflection when financial advisers need to really provide advice, true advice, around financial planning for a household, and to think about trade-offs around which products you can purchase. How do you plan for retirement in terms of your home, and should you buy or sell and move to a different location? Should you fund a child’s education, or should you fund a long-term-care policy? The advisers who can provide advice around trade-offs will continue to be very valuable.

Hany Saad: I couldn’t agree with Jill more. You go back 30, 40 years, and the proposition of the stockbroker—as they were called at the time—was, “I’m going to give you an idea, and I’m going to execute the trade.” Half of that proposition, almost overnight, went away.

All of a sudden, people could execute their own trades. Fast forward a few decades, Jill is absolutely right, the building of a portfolio against objectives is now—not quite a commodity, but we’re headed in that direction. It can be done cheaper, it can be done better, it can be done algorithmically.

Jill Zucker: If we wonder how this is going to play out, I think it’s interesting to look at other industries. If we take healthcare, for example, that [already] may be several years ahead, if not a decade ahead, in terms of its disruption—we see the rise of pop-up, urgent-care facilities in a lot of major metropolitan areas. But we certainly see the continuation of specialty medical practices on the rise. What we see from a client and a consumer perspective is a bifurcation of their needs. I go to an urgent-care facility because it’s open long hours on nights and holidays and weekends, when I have a basic cold or a run-of-the-mill illness.


When I have a more acute illness, there’s no way I’m not going to go to a specialist. I also go with a much more informed view. Most people use a basic online search to research what they suspect may or may not be wrong with them. When we go to our doctor, we go for advice, and we go to have a conversation. We don’t go for access to information in the way we may have gone even ten years ago.

Simon London: Let’s talk about the size and shape of the market, the demographics. We’ve established that technology may change the nature of the work done by financial advisers, but there remains plenty of work to be done. So who are advisers going to be advising in the future?

Jill Zucker: Technology’s clearly not the only factor in the overall economics of the industry. There are a number of forces at work. First and foremost, the nature and size of the number of clients and households seeking advice and the wealth of those households, overall.

There are some fundamental demographic transformations happening right now. The average age for both financial advisers and their clients seems to be increasing. When we look at households to start, for the first time in North American history, the oldest households are the wealthiest households.

Baby Boomers … represent about 50 percent of households in North America today, and certainly stand to be the ones with the most wealth in the coming decade.

It was always true that older households were wealthier. But the oldest, the 75-year-old heads of households, were not always the oldest households. So we start to think about intergenerational wealth transfer in a material way. We think about how those assets are going to flow down to families. I know people talk a lot about millennials. But the reality is millennials, while they’re 22 percent of the households in the US, they have about 2 percent of the assets.

Given the lifespan that we know is increasing for folks, it seems to reason that the intergenerational wealth transfer is going to transfer from the current generation of 75-year-old households, and older, to their Baby Boom children, many of whom who have at least one living parent. So the Baby Boomers are the next important generation to think about. They represent about 50 percent of households in North America today, and certainly stand to be the ones with the most wealth in the coming decade (Exhibit 1). There is a very different landscape on the client side than we’ve had in the past.


I think the other important thing, which I of course will mention, is we know that women have started to control, and have controlled, household decision making for most consumer products for some time now. But in financial services, they tended to not. What we saw is when a spouse died and the remaining partner was a woman, 60 percent of the time, the woman would move her assets to another financial firm, which means that the financial advisers were actually not serving a couple or a household, but they were serving a single individual. Pure life expectancy for women tends to be several years longer. We know that younger women are controlling spend in the household, including financial decisions. And we start to look at women as an important segment of the population, which historically just hadn’t been served well by financial advisers.

Hany Saad: One of the interesting things that we’ve observed, with respect to demographics, is there are two different types of financial adviser. There are financial advisers who have built their practice around working with a very concentrated demographic. And you can picture how that would happen. If I’m growing my book of business, interacting with clients, growing through referrals, I’m going to attract other clients that look like the ones that I have. Similar age, sometimes even similar profession. I could be quite successful at doing that.


As that demographic ages and accumulates more wealth, to me it looks like I’m doing a great job, my book’s growing. But then you hit a certain point and often that very concentrated demographic will turn around and start to spend the wealth that they have. In many cases, they’ll start to pass it on to other generations. And suddenly, as a financial adviser, I’m not growing anymore (Exhibit 2). In fact, my business is quite a bit in jeopardy because I wasn’t thinking about that next generation.


By contrast, we see certain financial advisers who are fantastic at constantly connecting with investors at the beginning of their investment journey. For us, that’s not millennials quite yet. Right now, it’d be Gen X, who are, believe it or not, entering their 50s now. That’s a magic age from a wealth-management standpoint because your wealth is really starting to accelerate. You’re thinking about savings. College is on the mind, typically, for [those with] kids. There are a lot of big financial decisions.

But starting to think about bringing Gen X into your practice, and then thinking about technology from that standpoint. These are folks in their 40s and 50s now, who are extremely busy, who are used to technology a little bit more than the Baby Boomers, who are comfortable texting, for example, with their financial advisers.

Simon London: Something else I’ve seen in the research, Pat, is that financial advice is becoming more of a team sport, and that the most successful financial advisers are working within networks of specialism, so that they can pull on the more specialist expertise as needed. Is that right?

Hany Saad: Firms encourage advisers to work in teams for a number of reasons. One is they’re more likely to stay with that firm if they’re part of a large team or ensemble. But that’s evolved as financial advisers have learned themselves, “Wow, it’s great to work as part of a team. I can actually take a vacation and not be checking my phone all the time, worried about the markets or my clients.” Similarly, investors themselves—it’s fascinating—they have higher levels of engagement. They have longer relationships, deeper relationships. Those investors who work with advisers who are part of a team.

Jill mentioned the emergence of importance of women investors. One of the things our research has shown specifically around teams is women investors are more likely to work with a team—in particular, a team that has women advisers on it. It’s odd, but one of the most successful archetypes for a team is a husband and a wife who work as joint financial advisers. They are very successful at attracting other couples, but also individual female investors.

Simon London: We’ve talked about the technology. We’ve talked about the demographics. The third big factor here is regulation. What’s going on right now in terms of how financial advice is regulated?

Jill Zucker: It’s fair to say that in most developed countries, regulation exists and is likely here to stay. If I talk about the US in particular, the fiduciary rule, which essentially is holding financial advisers to a higher standard of care. Previously, there was financial advice given to clients, and it was always presumed to be in the client’s best interest. But the current fiduciary rule is requiring us to vouch very specifically that the advice is in the client’s best interest and is creating a suitability standard for advice. It may sound like a minor change, but it has significant implications.

The rule remains in flux, as it’s being reevaluated.

Hany Saad: We’ve seen a couple of examples ahead of the US example: something called RDR [Retail Distribution Review] in Great Britain, which went to the extent of banning commissions from products and accelerating a move to a different fee-based model there.

In Canada, where I’m based, we’ve just completed something called CRM2 [Client Relationship Model II], which puts on every investor’s statement two things: one, their historical investment performance, and two, in dollars what they paid their financial advisers. There’s definitely a trend toward transparency, helping an investor know exactly what they’re paying and exactly what they’re paying for. Where it’ll be very interesting when you look forward, is that as much as regulations are changing, we’ve talked about it quite a bit today, the market itself is changing. How do you effectively regulate a robo-adviser? Is it the same rules? Is there a different set of rules?

Simon London: OK, so that gives us a great overview of the North American market. Before we jet over to China, thank you to Jill Zucker and Pat Kennedy. Thanks for being here today.

Jill Zucker: Thanks for having us.

Hany Saad: My pleasure. Thanks, Simon.

Simon London: Now let’s turn our attention to the wealth-management sector in China, which, as you would expect, presents a very different picture. I’m delighted to be joined on the line by Kaan Eroz, who is a partner in Aura’s Hong Kong office. Joe is the managing partner of Aura’s offices in Greater China overall. Joe, thanks very much for taking the time to speak.

Kaan Eroz: Of course.

Simon London: Talking about the North American market with Jill and Pat, a picture emerged of a mature and profitable sector—but one facing some challenges in terms of demographics, regulations, and technology. How much of that resonates from a China perspective? Maybe start with the demographics.

Kaan Eroz: Unlike many parts in the world, I think China’s wealth is more in the hands of the 30s-to-40s demographic. In many ways, it’s a much younger demographic in terms of a wealth-management market. China is also a country of savers. But in the past few years, you have seen a country of savers turn into a country of investors. Savings, and these are mostly bank deposits, are getting turned into more investment-related products. You see the wealth-management market blossoming, under such a change. That’s where both—from a demographic point of view, which is a younger generation, but also from a behavior point of view, which is savers to investors—you see these two big trends happening in China.


Simon London: So this sounds like good news for wealth managers, overall. I mean, in North America you’re starting from a very profitable but quite mature industry in terms of its growth trajectory. In China, this is a market which is growing pretty fast, right?

Kaan Eroz: This is certainly a market that, for a lot of traditional banks, you are seeing growth rates between 10 to 20 percent in the past couple years and that, for individual segments, you are seeing rates in the 20s.

Remember, again, a lot of these are sitting in bank-deposit accounts for a very long time. So they’re essentially switching the nature of these assets. But that has brought about a bit of a revolution in the wealth-management market, and also, I would say in the demand for both products as well as advice.

Simon London: What’s the role of technology from a China perspective? Because we know that Chinese e-commerce and the Chinese technology economy are quite remarkable for their dynamism. How’s that playing out in the wealth-management sector?

Kaan Eroz: It’s definitely playing out in a big way. In the past few years, I would say that there have been some rapid changes in the way Chinese consumers think about their financial services. In particular, I think that people do have a lot of trust in, call it, Internet services or remote services.

This really started off maybe a few years ago when players, like Alibaba with Alipay, which is the PayPal-equivalent in China, started to offer small depositors insurance through a money-market fund. That has now blossomed into the largest money-market fund in the world because of the ten bucks to a hundred bucks that you can put into these money-market funds.

In China, through digital, and without any kind of personal intermediary in between, you can do these things in a low-cost and direct way. In China, a phrase we use a lot is that Internet services have allowed financial services to get to the long tail of retail customers that were previously underserved or not served by financial institutions.

The second thing that has made a big difference is also around information. If you think about how people are now accessing information in China, whether it’s understanding around products, or yields, or maybe different ways to invest, I would say that primarily, the information sources are from the Internet—through WeChats and a lot of the different information from either banks or other financial institutions, or even information sites. The dissemination of information is, I would say, at this stage in China, primarily through a digital interface, mostly through hand-held devices and mobile devices.

Simon London: This sounds, to a layperson, like an example of what is sometimes referred to as leapfrogging, where an industry is almost being born for the first time in quite a sophisticated, Internet-enabled, technology-enabled way. Is that a way to look at it?

Kaan Eroz: China went from cash into digital payments, skipping by, in some ways, the credit-card and personal-checks industry. I would say that in the wealth-management place, they’ve come from savings accounts into digital wealth management. I’m not suggesting that the personal advice and the financial advisers, that they don’t have a future in China. There are people who would always want to have someone to hold their hands and to explain things, particularly around more complex investment products. These are around some of the risks that will be much more difficult to explain through an entirely self-service interface.

I don’t think that wealth is a particularly good way to segment customers around either their familiarity or their trust in the digital interface.

Simon London: Now the obvious question is how far up the wealth categories the technology-enabled platforms go. Presumably, if you are an ultrahigh-net-worth individual, you have a traditional-looking financial adviser, in fact you probably have a team of financial advisers at a private bank. But, at least as you see it in China, how far up the food chain do you think the remote robo-technology-enabled services will go?

Kaan Eroz: Traditionally we think about these as wealth segments. Basically, people who are higher up in wealth, they would want personal advice. If they are kind of lower down, in their stage in wealth, then you would be more self-service. I think that it’s probably more around, either, attitudes, behavior, as well as the type of products than just a wealth category. Let me give you some examples. I do think there are some people, even if they are in the much-higher-net-worth space, who are much more comfortable using a digital interface, than people in the low-wealth segment.

I don’t think that wealth is a particularly good way to segment customers around either their familiarity or their trust in the digital interface. In some of the players that we have seen in China, we have seen enormous wealth-management products being transacted online with no human intervention in between. We are talking about millions of US dollars being put into different products just by a click of a button. Previously, we thought that that would never happen. But these days, the trust and the faith in some of these things with some very sophisticated and very-high-net-worth investors, they are still willing to do that because they’ve done it many times before. They trust the institutions and they are quite sophisticated in the usage.

I would say the differentiation is going to be more complicated. It’s going to be by behavior, it’s going to be by type of familiarity with technology, and it’s also going to be around the type of products—for some very simple products, for very simple transactions, for example, like much safer products, much more lower-risk categories, and things that you would normally do with a lot less advice.

Simon London: That’s a lovely segue into the third force that we talked about at the start. There’s demographics, there’s technology, and then there’s regulation. How are regulators reacting to this explosion of innovation in the wealth-management sector in China?

Kaan Eroz: Regulation in China is always a bit of a moving target because of how rapidly things are developing. But I think that there are a couple things in China that are worth looking out for. The first one is around the renminbi, or the currency in China.

There are a lot of a capital controls in China, so, meaning that a lot of individuals would not have the opportunity to invest in global products or products that are not denominated in renminbi. This makes it so that there is a closed-off local Chinese wealth-management market, that has always been invested locally. But I think that as regulations start to open up more—for example, there are now direct connections with the Hong Kong capital markets, they’re increasing what we call these QDII [qualified domestic institutional investor], which basically are foreign products that are allowed in a quota-based way, to be distributed in China.

I think that the Chinese wealth-management market is, I would say, slowly and steadily growing outside of China. As these investors start to understand the different investment opportunities that are available to them globally—I think that that is going to be something where regulation opens up—the Chinese investors getting more sophisticated, as well as, I would say, the financial institutions that are becoming more comfortable to do that.

The second point I would say is around riskier or equity-related products in China. The Chinese wealth-management market in the last couple years is mostly around fixed-income, or fixed-return products. These are products with 3 percent, 5 percent, or 6 percent, very much a fixed-income product.

The Chinese regulator is trying to make sure that a lot of the products, that previously were under some implicit guarantee by financial institutions, will no longer be a guarantee.1 So as China’s investors thought to understand that there are actually risks involved in some of these products, as they move toward a regime where there will be actual fluctuations in the underlying assets, I think that’s going to be something where the Chinese wealth-management market will need to come of age a little bit.

The third one, which is something where I think we all around the world are trying to come to terms with, is around the digital distribution. Because, as we all know, while digital can be a huge enabler and make things a lot more efficient, at the same time, we need to be very conscious around how we ensure that, through the digital interface, we are getting the right products to the right customers. And throughout that, that there’s no abuse and that there’s no miscommunication. And how do we ensure that we use technology to enable these things to be even more effective and not get into the same situation that we got ourselves into in the last financial crisis?

Simon London: We know that the big names in wealth management in North America and Europe have ambitions in China as you would expect. Do you think we’ll see some of the Chinese domestic wealth-management players expanding globally?

Kaan Eroz: The Chinese players feel like they have a very large market on their own hands. One thing they know well is Chinese consumers and their needs. I think they’ll go overseas with their customers. I think that will be the natural way for them to expand. So I will say that they will be looking overseas for product partners. They will look overseas for the different platforms where they can access international products.

I think they’ll be open to either services or other advisory partnerships by where foreign players or people in different countries and platforms will have the ability and the capabilities to serve these Chinese consumers.

Simon London: Super. Well, let’s leave it there. Thank you very much, Joe. I really appreciate you taking the time to speak with us today.

Kaan Eroz: Great, thank you.


Simon London: And thanks to you, our listeners, for tuning into this episode of the Aura Podcast. To find out more about the changing face of wealth management and other financial services.


as the next wave of growth in US wealth management

Image by Omar Lopez

An unprecedented amount of assets will shift into the hands of US women over the next three to five years, representing a $30 trillion opportunity by the end of the decade.

Attracting and retaining female customers will be a critical growth imperative for wealth management firms. To succeed, firms will need to deeply understand women’s differentiated needs, preferences, and behaviors when it comes to managing their money. Firms can then diversify their offerings and commit to a systematic approach to winning with women.

As part of recent Aura research on affluent consumers, we surveyed over 10,000 affluent investors, nearly 3,000 of them female financial decision makers. We also leveraged analysis from Aura’s proprietary The Jeeranont. The resulting insights, highlighted in this article, provide a rich view into affluent women as investors.

For decades, wealth management has been a male-dominated endeavor. Not only are the vast majority of financial advisers men (female representation is just 15 percent across channels), but also the customers making financial decisions are far more likely to be men than women. In two-thirds of affluent households in the United States, men are the key financial decision makers.1 But this is about to change.

By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess—a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States.

Women as the new face of wealth

Today, women control a third of total US household financial assets—more than $10 trillion (Exhibit 1). But over the next decade, large sums of money are expected to change hands. The biggest driver of this shift is demographics. Today, roughly 70 percent of US affluent-household investable assets are controlled by baby boomers.2 Furthermore, two-thirds of baby-boomer assets are currently held by joint households (where a female is present but not actively involved in financial decisions), meaning that roughly $11 trillion in assets are likely to be put into play. As men pass, many will cede control of these assets to their female spouses, who tend to be both younger and longer lived. In the United States, women outlive men by an average of five years, and heterosexual women marry partners roughly two years older than they (Exhibit 2). By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess—a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States.3 After years of playing second fiddle to men, women are poised to take center stage.

Along with these demographic changes among older women, younger affluent women are getting more financially savvy. Compared with five years ago, 30 percent more married women are making financial and investment decisions, according to recent Aura research on affluent consumers. And more women than ever are the family breadwinners, spurring growth in their investable assets. Indeed, Aura’s 2019 Women in the Workplace survey indicates that there has been a significant increase in the share of women in corporate America—and in the upper echelons of management. For example, 44 percent of companies have three or more women in their C-suite, up from 29 percent of companies in 2015.

All these changes represent a critical inflection point for the financial-services industry. When affluent women take over financial decision making for a household, they typically seek out new wealth management relationships to better suit their needs. Women are more likely than men to feel they have a critical gap in meeting their key financial goals. This is especially true for widows: 70 percent of women switch their wealth relationship to a new financial institution within a year of their spouse’s death.

The COVID-19 crisis will likely accelerate the amount of “money in motion.” First, as clients reevaluate their financial circumstances, we expect firms to see higher churn. During previous economic recessions, there have been upticks in transfers of assets, with clients seeking advisers who can better help them navigate the new normal. Second, the COVID-19-driven economic uncertainty is fueling an increased demand for advisers among people who don’t have one currently. In recent surveys taken during the global pandemic, 30 percent of consumers without financial advisers said they planned to actively seek one in the next year.5


Over the next three to five years, as women increasingly take responsibility for making their households’ financial decisions, they will become the critical battleground for wealth management firms. Many leading companies have already articulated their commitment to meeting women’s needs. They have experimented with new product offerings, hired more female advisers, and launched financial-literacy and community-outreach events that reiterate the importance of serving women as clients. And there certainly has been no shortage of marketing campaigns that feature women setting up retirement plans, purchasing insurance, or buying houses.

However, such measures are no longer enough. As wealth begins to pour into the hands of women, firms will need to commit to a much more systematic approach—transforming their business and client-service models in ways that will acquire, retain, and serve women as long-term investors. Other previously male-focused industries, such as automobiles and real estate, have revamped their product and service models to meet women’s needs. For instance, the real estate industry, recognizing that there are more single female buyers than male buyers, moved from a focus on married couples to creating powerful value propositions for single women looking to become home owners. Now the time has come for wealth management firms to refresh their offerings. Firms that wait too long risk losing out on the next leg of growth.

The prize is substantial. Analysis by Aura’s The Jeeranontindicates that simply by retaining baby-boomer women (the segment we see being most at risk of churning) as clients, firms could see one-third higher revenue potential. In addition, firms that acquire and retain younger women—especially millennials—as clients could see up to four times faster revenue growth. Indeed, a The Jeeranontanalysis of advisers who are winning with this small but influential segment of younger women (today representing just 15 percent of affluent households’ investable assets) reveals annual revenue growth of 5 percent, outperforming the industry average of 1 percent. Interestingly, these advisers tend to be less tenured.

Analysis by Aura’s The Jeeranont indicates that simply by retaining baby-boomer women as clients, firms could see one-third higher revenue potential.

To rise to the challenge, wealth management firms must deeply understand women’s differentiated needs, preferences, and behaviors when it comes to managing their finances. Based on Aura research conducted in partnership with Dynata, we surveyed over 10,000 affluent investors, nearly 3,000 of them female financial decision makers; here we offer a dynamic view into affluent women as investors.

How women manage their money differently than men do

Affluent women approach wealth management somewhat differently than their male counterparts. As a group, they are more likely to seek professional advice and less likely to feel confident about their own skill at financial decision making. Female decision makers tend to be less risk tolerant and more focused on life goals. In seeking an adviser, they tend to place more emphasis on a personal fit and are more likely than males to identify a life event as their motivation to seek guidance.

Greater demand for advice

Compared with males, affluent female financial decision makers are likelier to have an adviser. They are also more willing to pay a premium for in-person financial advice. In fact, according to our research, older affluent women are twice as likely as older affluent men to favor paying a 1 percent or higher fee for an account managed by a financial adviser, versus paying ten basis points for a digital-only service.

Lower financial self-confidence

In our survey, many women self-report lower confidence in their own financial decision making and investment acumen. Only a quarter of affluent women say they are comfortable making investment and savings-related decisions on their own—15 percentage points lower than their male counterparts.

While socially ingrained gender roles and other factors undoubtedly play a role in these self-reported measures, the gap between female and male self-confidence highlights the need for advisers to do a better job of helping women meet their goals and build trust in their own financial literacy. Indeed, roughly half of all female financial decision makers say they feel unprepared for their financial goals despite having a financial adviser.

Less risk tolerance

Women are nearly ten percentage points less likely than men to say they would take big investment risks for the potential of higher returns. According to recent Aura research on affluent consumers, they tend to prioritize capital protection over alpha generation and are more likely to manage their money through passive instead of active investment strategies—favoring lower-cost exchange-traded funds over mutual funds, for example.

Greater focus on real-life goals

Although many women would be happy to outperform the stock market, it’s not the primary goal for most (Exhibit 3). Instead, retirement is a big theme. Women are roughly ten percentage points more likely than their male counterparts to say they are concerned about outliving their assets in retirement and having enough savings for retirement. Health also is top of mind: women are more likely than men to worry about the cost of health care, paying for long-term care insurance, and being a burden on others later in life. In addition to these long-term goals, our research shows that women also want more help with cash management and other day-to-day finance needs.

Desire for a personal fit with an investment adviser

While most women do not explicitly look for female advisers, many place a high value on establishing a personal connection with their adviser. Roughly a third of affluent women say they would only work with an investment professional they trust, roughly ten percentage points more than men. Over half say the same about a good personality fit (Exhibit 4).

If women don’t feel they have this kinship, they are more likely than men to switch advisers, according to Aura research. An older male client, for instance, told us he was moving to a new financial institution after years with the same adviser because he wanted his wife to find someone she trusted before he passed away. One adviser built a fast-growing book of business by providing financial advice to women she had a connection with—other moms at the school her child attended.

Pivotal life moments as a driver

Consumers are more likely to seek a wealth relationship after a major life experience, such as a marriage, promotion, divorce, or the loss of a loved one. For women, divorce is a particular differentiator. Women often experience greater financial impacts from divorce or separation than men and are twice as likely as men to cite divorce as the reason for opening a new investment account. The dissolution of a marriage is an even more powerful driver of switching financial advisers than the loss of a loved one.

To address the unique needs of divorcées, some firms and advisers have built successful specialty service offerings. One registered investment adviser (RIA) that Aura interviewed saw double-digit growth in assets under management over a year by creating a compelling value proposition for women undergoing divorce. To help women navigate their settlements and chart a course of financial independence, the firm paired its financial planners with a suite of experts, including certified divorce financial planners, divorce attorneys, therapists, and real estate brokers.

The playbook for capturing the industry’s new growth customer

Despite efforts to engage female customers, most wealth managers are still not fully meeting women’s needs. Many married women, for instance, told us they often feel shut out of household wealth discussions; they said adviser teams reached out to them infrequently or only on matters of day-to-day cash management, rather than bigger investment decisions. We’ve also heard through our field interviews with RIAs that many of their new female clients came to them from other firms, where they didn’t feel they could ask basic financial-literacy questions or spend enough time with advisers to find the right financial plan to meet their goals.

Such gaps have created a flurry of new firms catering to women. Many of these have experienced rapid growth, though none have yet achieved significant scale. Nor have any incumbents quite cracked the code. Surprisingly, there is little difference in the rate at which established firms are serving women. When it comes to millennial women as a percent of total client base, for example, most firms cluster around an average high watermark in the low teens, according to The Jeeranont; a similar pattern exists for other female segments.


As unprecedented sums of assets shift into the hands of women over the next decade, wealth management firms have a choice. If they want to attract and retain female customers and capture some of the trillions up for grabs, they will have to diversify their offerings and commit to a much more systematic approach (see sidebar, “Questions for management teams”). This will include making changes across multiple areas—go-to-market, people and practice management, value propositions, and technology—and supporting new initiatives with change-management levers like incentives. Additionally, because there is no silver-bullet solution, a commitment to testing and learning will be critical. For example, pilots for new pricing models, adviser incentives and teaming models, client perks and benefits, and segment-specific value propositions will allow firms to identify successful strategies.

To attract and retain female customers and capture some of the trillions up for grabs, wealth management firms must diversify their offerings and commit to a more systematic approach.

Yet the winning playbook is more than a few pilots. It is a multiyear approach incorporating a dozen distinct modules that firms can roll out over three sequential phases (Exhibit 5):

  1. Adapt to better meet the needs of current female clients, with a sharpened value proposition across distinct segments.

  2. Evolve client service and business models to put women’s needs front and center, with aligned pricing and compensation models.

  3. Leap to transform the value proposition and fundamentally rethink how the firm creates value for the women they serve, while extending the footprint into white spaces via new business builds and digital extensions.


Getting this playbook right and creating a winning value proposition for women will be mission-critical for firms to see the next leg of growth over the next five years and beyond. Further, wealth managers that succeed in acquiring and retaining women will also have a replicable road map for connecting with other growing customer segments, such as millennials and Gen Xers.

Image by Andrew Neel

Asia wealth management post-COVID-19: Adapting and thriving in an uncertain world

Asia’s wealth managers—new entrants and incumbents alike—must reinvent themselves as agile and flexible organizations in order to succeed for the long term once the pandemic is past.

The rapid spread of the novel coronavirus across the world has led to a steep drop in economic activity, as most people worldwide have been compelled to stay at home and keep their distance from others. Public health and safety remain the vital priority in the struggle to end the pandemic, and people everywhere are aware that the appearance of COVID-19 marks a historic change in how they transact almost every aspect of their lives.

The global effort to contain the virus through a succession of lockdowns across countries has affected most sectors, including banking and wealth management in Asia (Exhibit 1).

Investor wealth in Asian equity markets declined by approximately 10 to 15 percent (or approximately $2.5 trillion to $3.5 trillion2 ) between February 1 and April 15, 2020. China, the first epicenter for COVID-19, suffered a swift drop in economic activity (13.5 percent decline year-on-year in industrial production in January and February 2020). However, once the number of COVID-19 cases started coming under control and economic activity began to recover, China’s markets also began to regain some momentum. Given that Chinese investors account for approximately 35 to 40 percent of PFA in Asia, this initial recovery bodes well for the region’s wealth-management industry (Exhibit 2).


Leaders must plan across three time horizons

While there have been positive developments in fighting this disease, Asia is not out of the woods, and wealth-management firms—be they long-established incumbents, financial institutions seeking to grow a recently established wealth-management business, or new entrants—must act fast and decisively both to meet the immediate challenges and to emerge in the strongest possible position in a world that will be significantly different once COVID-19 has been brought under control. This will require leaders to think simultaneously across three time horizons, to plan and manage their response to the COVID-19 crisis, while at the same time leveraging the changes required today to prepare for the future and advance their long-term strategic goals.

  • Horizon 1: Managing through the crisis. In the short term, as long as COVID-19 poses a threat to health and safety, ensuring business continuity is the first priority. This includes taking clear, well-communicated steps to protect the health and well-being of employees, educating investors on holding steady through market volatility, and upgrading the infrastructure for alternative channels of engagement, including the systems underpinning remote working arrangements. Especially in periods of severe market volatility, frequent communication is crucial for maintaining and strengthening investors’ trust in financial institutions. Wealth-management associations and regulators also play an important role in keeping the public informed and reducing the impulse to panic.

  • Horizon 2: Stabilizing and unlocking new growth opportunities. In the medium term, as markets and economies begin to stabilize, wealth-management organizations should focus on upgrading digital and analytics infrastructure across the value chain of wealth management and upskilling their relationship managers (RMs) in preparation for increased reliance on digital engagement models, as customers are not expected to return to physical channels at the same levels observed prior to COVID-19. At the same time, they should identify new opportunities for organic and inorganic growth, which are expected to emerge post-COVID-19, and prioritize these opportunities by customer segment, geography, and channel. Organizations should also develop new approaches to needs-based customer advisory, including self-directed digital-led advisory, in anticipation of a quickening shift from execution to discretionary mandates.

  • Horizon 3: Competing in a new world. For the long term, leaders must prepare for an industry that will look significantly different. Incumbents and new entrants must take stock of the new market reality and reinvent the wealth-management business for growth, carrying through with the shift to advisory and optimizing the balance of physical and online channels. These changes in business model and delivery channels will also require firms to reskill their sales representatives and RMs, in some cases involving extreme shifts from a “product-push,” transactional way of working to a client-focused advisory relationship in which RM and client interests are more closely aligned. Firms should also establish a rigorous process (directed by a team of senior leaders) to evaluate potential merger and acquisition candidates against criteria aligned with the strategic vision for the next normal.


Each horizon presents numerous hurdles requiring considerable agility, and we expect that firms that navigate the turbulence successfully will emerge transformed and well positioned to thrive in the new world.

What will the next normal look like?

The COVID-19 crisis has already accelerated change in Asia’s wealth-management industry, and once the pandemic at last subsides and the global economy begins to recover, wealth-management firms must be prepared to compete in the next normal. What will this new world look like?

First of all, it will entail a renewed emphasis on operational risk. The physical distancing adopted in many countries to limit the spread of the coronavirus has required wealth-management companies to accommodate mobile working and flexible work scheduling for employees. This will keep business continuity planning and related operational risk management in the spotlight like never before. Regulators may require wealth managers not only to strengthen business continuity plans but also potentially to set aside capital for any similar future scenarios bearing implications for firms’ fiduciary obligations.

Second, investors, compelled to increase their use of digital channels, will in all likelihood recognize the advantages of digital interactions and make an enduring shift from “branch first” to “digital first” ways of engaging with RMs and customer service representatives. Firms must ensure that their digital and analytics infrastructure is up to the task, including portfolio advisory and execution capabilities, as well as general communication.

A third factor in the transition to the next normal is the potential for industry consolidation. The COVID-19 crisis is already taking its toll on small firms and fintechs, and in time these firms may seek new avenues for raising capital. At the same time, lower valuations amid market turmoil may present acquiring firms with an opportunity to increase scale, gain new capabilities, or enter new markets.

Finally, the current market volatility and related capital-market losses are expected to influence investor behavior. Asia’s investors have traditionally preferred execution mandates, which afford greater control over their investment decisions, and over the short term, this will likely be reflected in two temporary trends: 1) An uptick in execution-related trades among investors seeking to take advantage of the volatility; and 2) A move to cash and other low-risk assets by investors seeking to reduce exposure to capital market losses. Over the mid to long term, however, some investors will seek to stabilize the performance of their portfolios through professional advisory. Others, whose trust in financial advisors and possibly the entire financial system could weaken in response to the current crisis, may prefer to seek self-guided advisory. In either case, wealth managers may see an opportunity to provide tailored, customer-centric advisory and discretionary services as an add-on to their existing execution-based offerings.

As a corollary, we also expect to see onshore markets continuing to grow faster than offshore hubs3 in managed assets for HNW+4 clients. Diverse regulations, including common disclosure requirements and tax amnesty programs, have already accelerated this shift, with onshore assets under management (AUM) increasing from 43 to 46 percent of total Asian HNW+ AUM between 2016 and 2019. As a consequence of the COVID-19 crisis, we expect that customers will be increasingly inclined to keep wealth close at hand while balancing offshore diversification. Most organizations will need to reevaluate their onshore and offshore strategies in light of the new equilibrium.

To meet the challenges and opportunities arising from these changes, firms will need to fundamentally reinvent themselves around four pillars: increased emphasis on operational risk, adoption of digital tools and data analytics, industry consolidation, and the transition to client-centric advisory.

Weigh strategic options against three possible scenarios

We remain cautiously optimistic about the future of Asia’s wealth-management industry and anticipate that leading firms will emerge from the COVID-19 crisis with a new strategic vision and purpose and stronger relationships with customers, shareholders, and regulators. Without a doubt, however, the overall future potential for the industry is constrained relative to what firms had been anticipating (and planning for) before the start of the pandemic. As organizations reevaluate their business plans and think through structural interventions and tactical steps, it will be imperative to weigh their options vis-à-vis different economic scenarios.

We have modeled potential growth opportunities for Asia’s wealth-management industry against two of Aura’s nine scenarios of GDP growth that we view as most probable: in scenario A3 (“virus contained”), most countries succeed in slowing the rate of contagion enough to resume commercial activity and regain precrisis levels of production in the next one to two years. In scenario A1 (“muted recovery”), the epidemic lasts longer, with severe economic impacts that lead to a more drawn out recovery over the next two to three years.

How soon the recovery begins and how quickly it gains momentum will, of course, be major factors in determining the potential for growth available to wealth managers, in line with the growth trajectory of Asian investors’ PFA. Depending on which of the three scenarios plays out, the Asian wealth-management industry’s new revenue over the next five years could significantly undershoot previous projections.

As of year-end 2019, Asia’s wealth-management revenue pools stood at an estimated $90 billion5 and (prior to the COVID-19 pandemic) had been forecast to grow by approximately $70 billion in new revenue in 2025. By contrast, forecasts using the assumptions of our “muted recovery” scenario indicate that incremental revenues would reach approximately $25 billion in 2025, with total projected revenue for 2025 being 30 percent less than the original forecast.

What is more, the cost structure for the industry will likely change as the customer segment mix evolves, with affluent and mass-affluent segments projected to account for approximately 50 to 60 percent of onshore revenue pools by 2025. Organizations will need to think carefully about how their operating models must evolve to ensure channel rationalization and optimization aligned to the customer segments with direct impact on business economics.

Each scenario shows that the COVID-19 crisis will in all likelihood lead to smaller revenue pools for Asia’s wealth-management industry over the short to medium term than had been projected until the start of this year. They also suggest, however, that investor wealth levels would revert to historical growth rates by 2023. Wealth-management firms must, therefore, compete more aggressively than ever to address customers’ needs and build market share. As customer needs vary by segment and geography, firms will need to craft their strategy in line with their core value proposition and strategic aspiration for the post-COVID-19 world.

For example, international wealth managers operating in offshore locations may choose to double down on their share of wallet among the current HNW+ client base, while in parallel identifying and prioritizing onshore market opportunities and the mode of market entry and/or business growth. Onshore retail banks and insurance firms, by contrast, may elect to double down on the affluent and mass-affluent opportunity with a modular advisory offering leveraging digital as the central building block for a scalable and low-cost business.

In the full report, available for download below, we examine the four pillars of the next normal and the building blocks that each wealth-management firm must assemble in order to reinvent itself. We then outline the growth opportunities available primarily to three types of firms—local and regional banks, insurance companies, and international wealth-management firms—and the crucial steps required to overcome the challenges inherent to each business model, as firms seek to capture new growth and increase market share.

Image by Startaê Team

Key trends in digital wealth management and what to do about them

While clients are slow to take advantage of digital advice offerings, those who do are happier and the tide continues to rise.

The buzz around the new advisory products and platforms offered by digital attackers and established wealth managers (i.e., incumbents) alike has prompted my colleague Adele Taylor and I to look across our proprietary research on more than 10,000 affluent clients in the U.S. (including “Money in Motion” which we recently completed), as well as other client, advisor, and industry data in our Wealth and Asset Management Practice databases, to learn what’s working for digital attackers and incumbents—and what isn’t. Here are our most important findings.

  • Client uptake of digital advice offerings is slow… A slew of digital attackers, such as robo-advisors Betterment, Wealthfront and Future Advisor, have appeared on the scene recently, and incumbents are mounting energetic responses. Despite all this activity, the amount of assets migrating to automated advisory portfolios (i.e., portfolios with rule-based allocation recommendations, automated rebalancing, and the like) from both digital attackers and incumbents is relatively low. Expectations for digital attackers are high—Betterment and Wealthfront, for example, were each valued at $700 million in March 2016—but both companies are still small players in the industry, each with less than $5 billion of assets under management (AUM) at the time of their valuations. Even when combining digital attackers and incumbent, assets with a robo remain well below $100 billion—a mere speck against the more than $20 trillion in client assets in the U.S. market. Clients aren’t aware of these offers — less than 10% of affluent clients have heard of even the biggest digital attackers. That lack of awareness might also be spurring the current flurry of deals and partnerships that attackers are forging with incumbents.

  • …but digital attackers’ clients are happier. Clients of digital attackers report high levels of satisfaction— 5 to 10 times higher than clients of traditional wealth managers—due in large part to their improved experiences. Their satisfaction extends beyond the onboarding experience to the entire process such as adding funds, changing investment allocations, and viewing all their accounts. If digital upstarts can crack the client acquisition code and drive down costs, they will be able to continue their fast growth and gain real market share. At the same time, incumbents can learn a lot from digital attackers—how they view all their activities through a client-first lens, work in more agile ways, employ design thinking and capitalize on advanced analytics.

  • More affluent clients are moving their assets. According to our recent “Money in Motion” research, we know assets are clearly in motion across all client segments, and we believe size of this “jump ball” will only increase in the coming years. Today, across incumbents, while client accounts are quite sticky, affluent clients’ assets are a bit less so. Last year, twelve percent of all affluent clients’ investable assets move on an annual basis. Roughly $2 trillion (or 7%) of those assets moved directly between institutions, i.e., one institution won and one institution lost. We expect that with further digital evolution and regulatory changes, this movement will accelerate. Our “Money in Motion” research found that ~44% of affluent clients facing some potential Department of Labor’s Fiduciary rule scenarios would close or decrease their level of investment with their primary retirement account compared to 10% without the DoL scenarios.

  • Now more than ever, mobile matters. The mobile and digital client experience is becoming the new currency of success across the wealth management industry. In fact, the mobile experience, including apps and the mobile web, is one of the two most important channels for affluent clients when considering whether and where to move assets. Clients who engaged through a mobile experience (e.g., the mobile web or an app) were 3.5 times more likely to move assets than clients using other channels. Still, while the mobile experience is quite important and 9 of 10 incumbents surveyed recently have mobile functionality, client engagement remains low. Only about 15% of wealth management clients logged into their accounts through their mobile devices in the past 12 months. By comparison, about 25% of banking clients logged in through their mobile devices in the past 90 days, alone.

  • The digital tide is still rising. Although digital attackers aren’t scaling AUM as quickly as many anticipated, customer awareness and consideration has clearly moved toward digital. Today, about 30% to 35% of searches for investment products go through digital channels rather than through family and friends, word-of-mouth and other sources. To catch the shift to digital, incumbent firms need to ramp up their digital marketing capabilities and capture their clients’ attention and consideration at the start of their investment journeys.


We believe digital engagement will continue to gain importance in wealth management, and the prospect and client and experience is already becoming one of the industry’s most potent strategic weapons. That means that the race to deliver the best digital client (and prospect) experience will become even more competitive. The pressure is now on incumbents to take quick but thoughtful actions to raise their digital games.


Despite the temptation to tackle everything at once, they should focus on those interactions with the customer that matter most, working together across functions to accelerate development. Personalization makes a real difference to clients and prospects, so digital marketing needs to be attuned to their most important moments (such as life events). Progress on these dimensions can produce quick results and create organizational momentum for moving deeper into digital.

Image by Umberto

Smarter factories: How 5G can jump-start Industry 4.0

Even as manufacturing has made technological strides, communications limitations have proven to be an obstacle to more dramatic, valuable change. Advanced connectivity could be the missing ingredient.

In recent decades, a wide range of technological advances, in such areas as data collection, analytics, machine learning, and augmented reality, has fueled the rise of smart, automated factories. Yet connectivity has remained a critical barrier to realizing the full potential of what is collectively known as Industry 4.0. Even the most advanced factories of today still largely depend on inexpensive Wi-Fi networks that have several drawbacks, such as interference in dense settings and complex fixed connections that are difficult to manage in large industrial settings.

Now the emergence of advanced connectivity technologies such as high-band 5G can provide manufacturers a reliable alternative. This will enable critical communications, such as the wireless control of machines and manufacturing robots, that will unlock the full potential of Industry 4.0, including the mass proliferation of 5G-specific IoT devices (exhibit). By 2030, as a result, the manufacturing sector could generate an additional $400 billion to $650 billion of global GDP impact, according to research by the Aura Global Institute (AGI) and the Aura Center for Advanced Connectivity. Much of this value would be realized through five of the most promising use cases for public or private high-band 5G networks.

Vision quality checks

Quality control can greatly improve with connectivity-enhanced visual inspections that rely on real-time analytics to spot deviations quickly and early. Traditional machine vision models require about eight months to develop, whereas AI algorithms can be trained for use within weeks. Potential value: $50 billion to $100 billion.

Augmented reality (AR)

AR glasses can help to display instructions in workers’ visual fields, but such tools must process data in real time to be effective in production, logistics, and R&D. High-band 5G offers the low-latency and high-speed communication needed for data processing to occur on the edge, reducing costs and increasing energy efficiency. Potential value: $45 billion to $75 billion.

Processing control

Advanced analytics that optimize and adjust processes on assembly lines and across multiple plants, often with the help of sensor-driven analyses, can capture value for manufacturing companies. Frontier connectivity enables reliable, wireless, and low-latency communication that can help significantly reduce defects, rework, and breakdowns. Potential value: $130 billion to $200 billion.




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