Wealth management companies could spend their IT investment more effectively

Many wealth management companies are failing to align their business and IT strategies despite ambitious plans for growth as the economy continues to recover from the financial crash.

This is a key finding of research carried out by Advanced 365 (Advanced) in partnership with Compeer, a leading provider of business performance benchmarking for the UK wealth management industry. The research findings have been published in a new white paper – Effective IT Investment for Wealth Management Firms.

The report is based on interviews with 12 high ranking C level executives and heads of department at some of the leading wealth management firms. The research was undertaken to garner their thoughts on their effective use and investment in IT systems and infrastructure from a strategic and operational standpoint.

More than half of interviewees believe there is a disparity between the priorities of IT and the business as a whole and that ambitious growth plans can be frustrated by a lack of agility in strategic IT planning.

> See also: Business transformation and strategic IT: putting the CIO to the test

Almost all interviewees agreed that continued investment in technology will support business growth. The survey revealed that business process automation, online capabilities, customer relationship management (CRM) and core solution integration are the main priorities for the next three to five years.

Neil Cross, Managing Director from Advanced 365, comments: ‘This research highlights that the disparity between business strategy and IT priorities is hindering progress and shows it is a source of frustration for many of the people interviewed.’

‘On the positive side, there is growing confidence in the wealth management sector and investing in new technology is perceived to be central to business growth. We also believe the disparity between IT and the business is already being reduced as more CIOs are asked to concentrate on implementing solutions that increase profitability as opposed to maintaining existing internal infrastructure, which has been their traditional role. We would urge all CIOs to focus on aligning business and IT priorities and use their expertise to recommend solutions best suited to their firms’ needs.’

All of the interviewees stated that they would be prepared to outsource one or more business IT function to a third-party, however, outsourcing is still perceived as being an expensive alternative to managing functions in-house.

> See also: CIOs struggle to prioritise strategic projects and align with business strategy- survey

Cross says, ‘While it’s encouraging that everyone interviewed for the research is open to the idea of outsourcing, the perception that it is a high cost option needs to be challenged. The majority of wealth management firms that strategically outsource the most time consuming and onerous IT tasks to specialist managed service companies achieve a very rapid return on investment.”’

Cross concludes, ‘IT staff who were previously tasked with ‘keeping the lights on’ now have more time to concentrate on technology projects that enable business growth.’

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...