In Part 1 of this blog series, we reviewed how investors are increasingly attracted to companies that have mastered the essentials of relationship building. According to the 2021 EY Global Wealth Research Report, an increasing number of investors are gravitating toward virtual and digital wealth management. Therefore, building a relationship with your investor is key. Although investors are opting for automated and digital tools, they prefer personalized engagement from their advisors. A hybrid model offering a personalized service with complementary digital tools – and the right investment management software – is an ideal path forward for wealth managers.

Now, let’s examine another way wealth managers can benefit from using the right investment management software.


ESG & Sustainability | A Key Wealth Manager Differentiator for Turning the Tide

Focusing on Environmental, Social, and Governance (ESG), Sustainability and Impact Investing is another key area for competitive differentiation. Purpose-driven investing is now a mainstream objective of investors worldwide, with 78% of wealth clients surveyed by EY reporting that they have goals related to sustainability and want ESG parameters integrated into their portfolios. Almost half of the firms think that their wealth managers don’t fully comprehend their sustainability goals. And, in the next three years, 35% of clients with sustainability goals are also seeking to move away from their wealth managers. When EY surveyed clients who do not have any sustainability goals – only 15% were looking to change wealth managers over the next few years. Therefore, ESG and responsible investing isn’t an area to be ignored by today’s wealth managers looking to increase their client base tomorrow.

EY Global Wealth Research Report, Page 33

Figure 2 2021 EY Global Wealth Research Report, Page 33

A strong understanding of ESG and Impact investing gives wealth managers an upper hand but implementing a platform that empowers you to share details of holdings’ performance with investors is a strong indication of your firm’s focus on sustainable investing. Implementing an investor portal that enables you to build out ESG portfolios, and monitor their benchmarks and KPIs along with transparent communication, is an integrated and differential strategy.

In summary, while there are several factors that come into play when selecting a new wealth manager, ‘sustainable investment propositions’ is one of the most important. In the final blog of this series, Part III, we will explore how unifying portfolio and investor information can be another key competitive differentiator in a wealth manager’s arsenal.