2019 Investment Management Outlook: A mix of opportunity and challenge
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Customer preferences are diverging
Expectations are diverging between investor segments.
Most Millennials and Gen Z (born from 1995 to 2010) have
made a quantum change in their investment practices
from those of their parents. These cohorts will eventually
hold a signicant share of global investable assets as
the multitrillion-dollar intergenerational wealth transfer
progresses in the United States and Europe.
7
They tend
to prefer engaging with online and mobile channels, a low
minimum initial investment amount, and 24/7 access to
investment advice on smart devices. Meanwhile, more
experienced segments (Gen X and Baby Boomers) are
often expecting elegant interactions through their mobile
and online investment accounts and professional advice
on demand. On the other side of the spectrum, most
institutional investors are demanding better portfolio
transparency, tailored investment solutions, and
global products.
Regulatory fragmentation continues
Securities regulations across the United States, Europe, and
Asia are changing according to diverse priorities. Navigating
multiple regulatory regimes could be challenging for many
global investment management rms. In addition, the onset
of new rulings globally will likely complicate regulatory
compliance management in 2019. Building regulatory-ready
organizations to manage change as though it is ever-present
may improve eciency as rms manage regulatory and
compliance risk.
8
Tech-savvy rms are putting pressure on
traditional rms
Many investment management rms are planning for
potential disruption caused by new technology-based
entrants. These disruptors could shake up online fund
distribution, digital advice, or micro-investing with their
expertise in digital experience delivery or large customer
bases. These potential new entrants are likely to provide
low-cost services, coupled with digital-age capabilities,
aiming to build relationships with Millennial and Gen Z
cohorts before they are targeted by incumbent rms.
Given this complex and challenging industry environment,
investment management business leaders should consider
three core questions:
1. How can we grow our business?
2. What are the possibilities to run our operations
more eciently?
3. How can we deliver the next level of customer experience?
The answers to these questions are typically particular to
each organization and tend to evolve over time. Investment
management rms that address them with bold, strategic
investments and eective execution are more likely to
achieve success.
Regulatory change is driving
many rms to commit resources
to evaluate and change their
operating models to meet their
plans for growth and eciency.
―Patrick Henry, Vice Chairman, US Investment
Management leader, Deloitte & Touche LLP
