1. Running with robo advice… redefined

Face-to-face advice from asset and wealth managers will no doubt continue as the dominant engagement channel. However, the climate of social distancing and isolation has catalysed a much quicker transition to video and telephony hybrid advice. Businesses with existing, or impending new ‘robo advice’ options could prove more resilient in the coming months.
These trends are already in play - we have read of Goldman Sachs’ plans to launch a robo adviser (‘Marcus[1]’) in 2021 to complement its digital banking business, and the rapid growth in new multi-propositional solutions such as OpenMoney, a fintech financial advice specialist. We expect to also see greater collaboration between major strategics and fintech in order to access markets rapidly and meaningfully. There is also likely to be an acceleration of consolidation across the major advice players given the clear opportunity to create significant margin improvement as distribution channels evolve from their more traditional methods.
As a result of Covid-19, we will therefore likely see robo advice redefined – although its very essence will remain the provision of financial advice through a digital channel, it will be the variety of channels used which will redefine it.

2. Internally switched on

The application of a digital advice channel is only possible with the right underlying technology internally for FS players. We will therefore see the development and adoption of CRM tools and platform technology, allowing businesses to deploy multi-channel product sets. This technology will also cater for remote working at scale and will be able to offer a seamless customer service solution without the need for centralised call centres. Through emerging players such as Hubwise and EValue, we expect to also see a more rapid conversion of legacy assets onto a digital medium. Considerations will need to be made, however, for severe restrictions around an offline client base and an – which in many ways makes asset and wealth managers all the more crucial in this climate. We have seen M&A play a part in driving the
inability to provide these clients with an engaging and value-adding advice proposition.

3. The tech-shield for clients

Covid-19, like any potential recession catalyst, highlights the relationship between quality financial planning and protection of wealth
expansion of technology across the sector through deals such as M&G’s proposed acquisition of Ascentric[2], Schroders’ purchase of Benchmark Capital and Invesco’s acquisition of Intelliflo.[3] Increasingly, wealth and asset managers are leveraging technology, such as the ground-breaking digital DFM solutions offered by new tech players such as PortfolioMetrix, to preserve client capital and reduce overexposure through risk mitigation tools and algorithm-based portfolio selection. These features allow for immediate, discretionary movement of capital and are naturally seeing rapid uptake and strong traction across the financial planning market.

4. Accessing alternative assets portfolios

Alternative asset platforms will continue to gain momentum in coming months as asset and wealth managers look to diversify portfolios for long term resilience. We believe that providing access to ‘alternative’ connected marketplaces will be key for the preservation of capital and will ultimately drive innovation in this space as Covid-19 accelerates adoption. There has been a surge in demand to invest in alternative platforms, such as Blackrock’s acquisition of eFront, Ping An’s investment into iCapital and subsequently iCapital’s acquisition of Artivest.[4]

The global Alternatives market has been forecast to grow by a CAGR of 6.5% between 2019 and 2023.[5] We should therefore see global funds under management in excess of these growth rates as a result of enhanced demand for greater exposure to these asset classes.

Source: Prequin 

5. Application of PESG* filters to investments

*Pandemic-resilient, Environmental, Social and corporate Governance

ESG is already an essential tool to assess the sustainability and societal impact of investments and represents, according to Moody’s, the ‘next growth frontier for asset managers’. However, investors will now want to understand the resilience of a company in a pandemic environment – so ‘PESG’ may well be a term which becomes the norm.

We expect that this theme will see a greater proportion of capital being directed to sectors and businesses which have shown much greater resilience through Covid-19 – medicare (for example, Molina), tech (Zoom), life sciences (Avacta) and e-commerce (Amazon) to illustrate a few stand-out areas. Technology players, such as Arabesque, will play a key role in filtering PESG investments – from both a scoring and stock-picking perspective.

Source: FactSet, 26 June 2020


We expect that UK asset and wealth management players will be forced to optimise tech for the future proofing of their client propositions, their internal infrastructure and their processes. M&A will be a clear consequence of this shift - already we are seeing a number of technology companies prepped to accelerate an, up until now, predominantly reluctant sector.

We are seeing the willing buyer and seller dynamic to be extremely compelling – the buyer needs a tech solution and can offer mass distribution, the seller needs mass distribution but can offer the tech solution.

Financial Services has an exciting future ahead, the adoption and proliferation of technology across the asset & wealth management landscape being an important statement of how an underlying resilience can lead to ground-breaking transformation across a whole industry.


[1] Investopedia, ‘Goldman Sachs to Launch Robo Adviser Next Year’, March 2019,https://www.investopedia.com/goldman-sachs-to-launch-robo-adviser-next-year-4779164

[2] Financial Times Adviser, ‘'Good news' for advisers as M&G buys Ascentric’, May 2020, https://www.ftadviser.com/investments/2020/05/27/good-news-for-advisers-as-m-g-buys-ascentric/#:~:text=M%26G%20is%20to%20buy%20the,of%20their%20clients%20to%20M%26G.

[3] PR Newswire, ‘Invesco acquires Intelliflo, the UK's leading technology platform for financial advisors’, June 2020,  https://www.prnewswire.com/news-releases/invesco-acquires-intelliflo-the-uks-leading-technology-platform-for-financial-advisors-300660508.html

[4] Real Street Asia, ‘Ping An’s investment into iCapital’, March 2020, https://bit.ly/31xQETt 

[5] Businesswire, ‘Silicone Global Market Report (2019 to 2023) - CAGR of 6.5% Expected During the Forecast Period’, Feb 2020, https://www.businesswire.com/news/home/20200228005431/en/Silicone-Global-Market-Report-2019-2023--


This article is for informational purposes only and is not, and may not be relied on as, investment advice.