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Wealth Management: Finding the Industry’s iPod Moment
When I left my first city job back in 2006, my colleagues gifted me an iPod. At the time, I didn’t fully grasp its value and left it boxed for over a year. Eventually, I gave it a go, and it completely transformed the way I experienced music. My CD collection, once a source of pride, was relegated to memorabilia, later encased in a friend’s clear flooring—a quirky reminder of the shift in how music was consumed.
This experience feels oddly parallel to where we stand in WealthTech today. The industry is brimming with innovative technology, but its value remains underappreciated or misused. Much like my pre-iPod music world, wealth management is struggling with outdated systems and the challenge of integrating new tools into a legacy infrastructure. Without a unifying leap forward—a “Bluetooth moment”—we risk limiting the full potential of emerging advancements.
The Industry’s Tipping Point
Nearly half of IFAs (Independent Financial Advisers) are expected to retire in the next five years. This inevitable shift is fuelling a wave of consolidation and represents a golden opportunity for the next generation of business leaders to reshape the status quo. Digital transformation is no longer optional; it’s essential. However, transformation doesn’t have to mean adopting fully automated robo-advisors. Instead, it’s about harnessing technology to improve efficiency and refocus on what truly matters: building relationships and delivering value.
A significant roadblock is integration—or the lack thereof. Across the supply chain, too much time is spent transferring data manually between systems. In few other sectors do key personnel waste so much time wrestling with outdated processes. My iPod moment came when a colleague helped me load my entire music library. Suddenly, I had access to a vast collection, streamlined for every context: jogging, reminiscing, or hosting a party. It revolutionised my relationship with music, much like better integration could redefine wealth management workflows.
Streaming, But Not Yet Streaming-Ready
In a previous blog, I touched on the need for streaming-style services in wealth management: low-cost, high-accessibility, and client-centric solutions. But the reality is that many businesses aren’t ready for this kind of disruption. Without tackling the challenge of integrating legacy systems, the industry risks skipping a crucial evolutionary step.
Wealth management has yet to experience its iPod moment, let alone its Spotify revolution. To unlock the benefits of cutting-edge technology, we must first embrace solutions that bring cohesion between the old and the new. The tools for automation and AI are already accessible; what’s missing is a willingness to take that leap, often requiring a champion within the organisation to show the way.
Platform 3.0:
Consider the emergence of Platform 3.0, the new generation of investment platforms. These promise richer functionality, tighter integration, and even innovative business models, such as Adviser-as-a-Platform. However, integration challenges remain. Asset allocation processes, for example, are still disconnected. Similarly, portfolio products rely on a supply chain push model with minimal coupling due to a lack of straight-through processing. Advisors influence where assets are directed, but the upstream inefficiencies often go unnoticed.
In an integrated ecosystem, the industry could achieve far more. Advisors could offer bespoke products tailored to specific investor groups, while discretionary portfolio managers could keep allocations aligned with greater precision. Platforms would better manage liquidity and inventory, and fund managers at the top of the chain could expedite the release of funds and special share classes. The result? More choice, lower costs, enhanced risk management, and improved outcomes for end investors.
Andrew Spence, of Aspen Advisers, has often presented the game changing effect that multi-platform integration could have on the model portfolio (MPS) landscape.
Commenting on his vision, he stated that “The Aspen business was initially going to be fully customisable portfolios – the optimal mix of assets for a client’s circumstances and needs – in a move away from traditional “cookie cutter” models. But it was a non-starter across multiple platforms. So, we needed to scale that back and offer advisers a complete CIP experience using model portfolio building blocks. Still, multi-platform integration of this takes time and resource. Better integration is badly needed.
Tikker are working with Aspen to automate Portfolio Operations cross-platform, bringing this evolution within reach.
Overcoming the CD Era
Right now, the wealth management industry feels stuck in its pre-iPod phase—juggling stacks of CDs, painstakingly organising them, and dealing with inefficiencies that make progress feel like an uphill climb. Worse still, these inefficiencies ripple through the supply chain, consuming valuable time and increasing the risk of errors.
What’s needed is an iPod moment: a unifying system that bridges legacy technology and modern tools, streamlining processes to unlock new possibilities. With integration and automation, the industry can shed its clunky inefficiencies, empowering advisors to focus on delivering genuine value to clients.
The Next Generation’s Opportunity
The next wave of wealth management leaders holds the key to this transformation. They must embrace technology not as a threat but as an enabler of better client experiences and operational efficiencies. This might mean prioritising solutions that balance creditworthiness with operational risk, acknowledging the role of custodians in securing holdings.
By bridging the gaps between legacy and modern systems, the industry can evolve into something far greater. The question is whether today’s leaders will seize the opportunity—or let it pass, leaving the wealth management sector to languish in an outdated era. For those ready to embrace change, the tools are already within reach. What’s needed now is the courage to press play.
Tom Whittle, Founder, Ticker
