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Publication: Business Day - Companies and Reach: 20014

Markets
Title: Wealth managers grapple with an unknown AVE: R 54104.24
future in digital era
Publish date: 01 August 2019 Author: Kurt April and Afzal Dalwai

Wealth managers grapple with

an unknown future in digital era
0 Leaders in UCT study showed strong emotional awareness and ability to think on theirfeet

Kurt April one7on7one human plus digital Weight:

and Aal Dalwai “advisers" 7 in what is known as The fourth
hybrid advice models. allowing industrial
mid seismic tech7 companies to access a broader revolution
nological changes. base of potential clients. includ7 intensifies the
leaders have to ing those with smaller portfolios challenge of
keep up with the not previously deemed eco7 catering to
times. And in the nomically viable for "high7 consumers
financial services sector. in touch" human engagement, who are
which growing competition There is general consensus under
from traditional and new players that wealth managers must be financial
has combined with tighter both high-touch and high-tech pressure
regulation and changing Millennials who eschew /123RF/:emisatch
investor behaviorus and expec human interaction are increas
rations, there is added pressure ingly entering the investment
on those at the helm. scene, and nimbleaninded
Recent research from the companies are quickly learning
UCT Graduate School of Busi— to offer altemative financial
ness (653) with a leading SA opportunities such as “crowd—
wealth management rm, funding" (pooling money to
which is responsible for the invest into individual assets) and
management of assets valued at “conveniences" (apps investors
more than $7bn. town! that can use to check their portfolios
leaders are feeling the pressure at any time) to cater to this tech—
to adapt how
they manage saywy market.
processes and people. to keep In addition, there is the
abreast with technological potential for technology to

advances and new regulations.
and remain competitive.
These have been volatile
times for wealth management in
SA. The 2008 global economic
crisis. the country's own debt
crisis of 2014 and
Nenegate scandal have all put
pressure on investors‘
disposable income.
Investors are looking for
more value and have become
more price sensitive about fees.
The fourth industrial revolu7
tion merely intensies these
challenges. A recent
showed that 31% of wealth man 7
agement companies
that they fear nontraditional and
tech savvy competitors such as
Google. Apple. Facebook and
Amazon taking a signicant
portion of their businesses,
To stay ahead. win
clients and secure good returns.
the industry will have to be dra-
matically reinvented
New7generation wealth
management companies are
reduce investment and opera7 attentiveness that allows them how best to leverage technology comfortable with being mature
tional costs through. for exam7 to best adapt to a changing land7 within their businesses. and ly vulnerable with their teams.
ple, the processing of
mass scape. They need to be empa7 their frustrations at being ham7 Mature vulnerability builds trust
amounts of data. savings that thetic and culturally intelligent, pered by a corporate gover7 and camaraderie that motivates
can be passed on in the form of and harness inclusive practices nance cultru'e that smothered others to push the envelope.
reduced fees or additional ser7 and engage diverse networks innovation and experimentation. They viewed diversity as a
2015's vices to potential investors. rather than tear or resent them they also demonstrated strong competitive advantage and not
While there is still a place [or The digital leader must adap7 emotional awareness and cog7 merely as a social responsibility
traditional leadership practices t'rvely operate across the follow7 nitive abilities. or enforced by compliance
in managing these variables. ing key dimensions: situational. They exhibited the ability to demands. They embrace diver7
leaders in the digital age have to cognitive. behaw‘oural and emo7 think on their feet and adapt sity as strategically critical as
expand their Wheelhouses. live. They must recognise that their plans as the landscape their rms seek to develop a
There is limited research into digital technologies will trans7 changes. They also showed a suite of inclusive products and
what thisexpanded skill set form their entire organisations willingness to cultivate the right services. They develop teams
might look like. but the literature and must be able to articulate cultures 7 those that do not stie with diverse opinions, willing to
study that does exist makes it clear this Visions of what the transfomia— innovation to ensure they constructively dissent that break
—
is no place for Luddites. tion will look like specically for create new products and ser from traditional herd thinking.
reported Leaders will need to demon theirorganisation's distinctive vices tlmt keep their organisa7 This bodes well for the
strate greater situational aware— competitive capabilities. tions relevant in increasingly industry as it braces for the
ness andcognitive agility in They must create environ competitive environments. emerging digital revolution.
resetting the strategic direction ments in which others are not locally and mternationally In a world (laminated by
of the business. They wiH afraid to experiment. innovate Leaders in the study focused technology. leaders need to
require a level of emotional and, yes. fail. They must have on being authentic and were inspire. engage and lead with
new longtemi views of both their optimism. And in so doing. they
own businesses and the techno— have the power to shape the
THEY MUST CREATE logical advances likely to disrupt THEY VIEWED futru'e of their industries and
and enhance their industry. the continent.
ENVIRONMENTS IN DIVERSITY AS A
The UCT GSB study revealed
WHICH OTHERS ARE that wealth managers in SA are COMPETITIVE 0 April holds the Allan Gray

changing the rules of the game, NOT AFRAID TO indeed grappling with these four ADVANTAGE AND NOT chair in the Allan Gray Centre
For example, they are bringing dimensions. While the leaders for Values7Based leadership at
EXPERIMENT. MERELY AS A SOCIAL
together traditional and techno7 interviewed in the study spoke UCT. Dalruai recently
logical investment models INNOVATE AND FAIL about their unfamiliarity with RESPONSIBILITY completed his MBA at the GSB.
7

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