In March 2020, not long after the World Health Organization declared that the SARS-CoV-2 outbreak had turned into a pandemic emergency, wealth management specialists around the world began receiving phone calls, emails, and instant messages from clients concerned about the crashing of global financial markets. Wall Street went through a couple of market correction episodes in just a matter of weeks, and other major exchange platforms experienced similar situations.
The subsequent recovery of Wall Street materialized in the form of a bull rally, which took place in tandem with a flight-to-safety strategy of investing in commodities such as gold and Bitcoin; this usually happens during a bear market, but such was not the case this time around. Despite deep uncertainty over how the global economy would be able to recover from the pandemic impact, trading and investing did not stop, and this suggests that wealth management also continued.
We know that demand for financial services such as wealth management did not stop during the pandemic; in fact, advisers were kept busy in 2020 by clients anxious to know how their personal finances or portfolios would be affected. The period of adjustment lasted many months and is still unfolding, which is why it helps to know some of the trends that will likely impact the wealth management industry in 2021. Here are some of them:
Some industry analysts believe that a few banks and firms will look at their assets under management and squeeze a few more basis points this year; perhaps no more than five. Margins are tighter, and the most conservative clients are being cautious to the point of not engaging in many transactions. A bump in the fees derived from assets under management would not be extraordinary, but it may not look good while we are still dealing with the pandemic. To this end, we can expect that some managers will play the waiting game to see that their competitors do; those who wish to attract new clients will either leave fees unchanged or may even lower them.
This trend develops whenever there is a downturn in the markets and clients do not place many orders or inquire about potential transactions. Value-added services can range from travel to shopping and from digital media to insurance. The goal is to provide a more personal touch that does not entirely revolve around money, but offering these services will often require partnering with third-party providers and assigning personnel to act as their liaison.
Providing Great Banking Services
Over the last few decades, Americans have grown frustrated with the retail banking experience; to this end, they have flocked to mobile alternatives such as PayPal and Venmo. If there is a personal banking component attached to wealth management services, it must be convenient, available, and top-notch. The last thing clients want is a spotty online or mobile banking experience that fails them whenever they wish to transfer money, make retail purchases, or pay utility bills.
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