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Wealth management: partnering to expand reach and capabilities
For wealth management firms, it’s crucial to attract and retain clients through different stages of financial maturity to meet growth objectives. Recent M&A deals, including Morgan Stanley’s acquisition of E*Trade, Charles Schwab’s acquisition of TD Ameritrade and Goldman Sachs’ acquisition of United Capital Financial Partners, have been driven in large part by this strategic imperative to broaden customer bases.
Ecosystems provide a more cost-effective way to achieve similar objectives. Leveraging the capabilities of partners to serve the digital needs of clients — something they have come to expect in other parts of their daily lives — can make those relationships more meaningful and longer lasting.
The following are some top considerations clients are seeking from wealth managers, and some perspectives about how ecosystems can help meet those expectations.
- Digital access. Retail clients are accustomed to accessing and buying products and services online and expect wealth managers to provide the same convenience. Partnering with FinTech and nonfinancial technology firms to enable seamless digital interactions not only can enhance the user experience, but also may enable stickier relationships.
- More diverse investment choices. By partnering with specialists to provide leading-class environmental, social and governance (ESG) and thematic fund options, wealth managers can solidify relationships with mass-affluent customers as their needs evolve. We expect global financial services firms will continue to partner with more technology-focused asset managers that have expertise in ESG investing to allow advisors to create personalized values-based portfolios for clients who increasingly care about the social impact of their investments.
- Account assessment and monitoring. Retail investors are more hands-on today and want transparency around the social impact of funds. Providing third-party tools that filter, screen and monitor investments can empower customers, making the relationship more relevant.
- Lower costs. Leveraging lower-cost back-office functionality from partners to enhance efficiency, resiliency and risk management can enable firms to provide greater value to clients.
Partnering with nimble FinTechs and other specialists via ecosystem strategies is becoming a preferred way for wealth managers to provide customers with high-quality digital experiences and leverage emerging technologies in pursuit of efficiency and resiliency.