While it is easy to see how evolving customer expectations are bringing robo-advisors and other types of wealth tech to the forefront of the industry, margin compression is also a driving force for adoption. As the emergence of low-cost products, greater emphasis on transparency and changing market dynamics erode profit margins, it will be essential for wealth managers to gain efficiencies by embracing technologically savvy solutions.
News: Time to digitalise amid tightening margins
Wealth management firms, both independent and bank-backed ones, have seen their pre-tax profit margins decline in each region of the world in the past decade. This has been due to factors such as the push by regulators for greater transparency and investor protection, the rise of low-cost passive investment vehicles such as exchange-traded funds (ETFs) and increasing competition from financial technology (fintech) firms, according to Boston Consulting Group’s Global Wealth Report 2017.The report says the biggest declines in pre-tax
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