We are talking to a number of wealth managers about the way that the role of advisors, bankers, investment experts and others are changing in the sector.

The world continues to adjust to the disruptions caused by the pandemic. The wealth management sector faces what some call a “perfect storm” of early retirements, with demands for ever more sophisticated advice, rising compliance burdens and economic turbulence. And there’s also artificial intelligence to consider.

The role of private banker, RM or investment advisor is changing – in some ways for the better. It’s still a pretty “pale, male and stale” occupation in much of the developed world, but hopefully, this is not as entrenched as before. Progress is still a way off, though. According to a 2022 study from Deloitte, the global professional services firm, globally, within financial services institutions, women held 21 per cent of board seats, 19 per cent of C-suite roles, and 5 per cent of CEO positions in 2021. 

In the US, the world’s largest economy, a study by research and analytics group Cerulli Associates finds that there is another issue: advisor attrition. The issue of ageing advisors is “considered one of the greatest threats to bank wealth programmes today." Bank advisors, on average, expect to retire at the age of 64 (four years earlier than peers in other channels); yet nearly one-third (29 per cent) of bank advisors transitioning into retirement within the next 10 years are unsure of their succession plans. In the UK, the pandemic created concerns about the ageing of the client base itself. (See here.)

The talk about AI tools such as ChatGPT has also raised the spectre of automation – something that until recently wasn’t a big worry for affluent white-collar professionals. Of course, digital technology has already affected wealth managers’ jobs: mobile devices to show clients their portfolios on the hoof; two-way video conferencing such as Zoom or Teams to remove the drudgery of travelling to in-person meetings; electronic signatures for documents; and much else. Mastering all this requires a level of technical proficiency beyond what the stripe-suited inhabitants of the City, Zurich or Wall Street might have required in the past. 

Advisor education, development and assistance has to keep pace. For example, the CFA Institute, which provides training and certification for advisors, has brought out a guide on AI, realising that this area is now important. The organisation has also done the same with ESG investing.

As I have noted before, the industry also has to figure out how to attract smart young people to join. Ever since the GFC of 2008, finance has lost a bit of its appeal. The demise of Silicon Valley Bank and Credit Suisse this year, for example, might make people hesitate about what sort of career banks offer today. But there’s much more to this sector than just banking.

In recent times, we've seen how the clients that wealth managers look after have evolved, requiring new skills. For instance, with more sportsmen and women becoming wealthy, who have particular needs, there has also been the arrival of managers who "get" what they want. We see this taking place in the US, for example. Client segments vary, and this can mean that people able to speak foreign languages are more in demand. Long gone are the days where one complacently assumes that everyone in business talks English. Backgrounds can vary: we've noticed a trend of former military personnel finding a home in the sector, for example. 

In coming days, we will be running a few interviews with wealth managers about how they see the jobs market changing, what remains more constant, and what the salient characteristics are. By all means continue to stay in touch with your views. Email tom.burroughes@wealthbriefing.com