In this launch episode, Khan sits down with operations director at Investengine, Marianne Oliver.

Oliver has previously worked for FNZ and LGIM and shares her experiences of entering the financial services industry in 2008 and the challenges she faced being a woman in a male dominated industry during the span of her career.

It also found that more than nine-in-ten advisers believe that retirement advice specifically should include property wealth.

Every adviser interviewed said they gather housing wealth information when building a holistic wealth picture, however it is used inconsistently for wealth gains.

Nearly half of all advisers refer their end-investor clients to an external resource for home equity release with 31% not considering home equity at all.

The data also showed that one third of advisers believe their wealth management firms could offer home equity solutions but have not, while 17% think there is no integrated solution available.

Roland Whyte, chief executive and founder of Nokkel, said: “House wealth needs to become more of a focus for advisers when they plan for clients. Especially in light of the now-live FCA Consumer Duty and the upcoming Retirement Income thematic review, which will only make house wealth more relevant to financial advice.

“But accessibility and data transparency are key to making this a worthwhile end-client experience. Modern technology that easily integrates with advisers’ platforms will need to be matched with reliable data. Then automated insights become a possibility.

“This is particularly important when considering financial solutions that have historically lacked transparency and advice, such as equity release.”

Mark Polson, founder of the lang cat, added: “Historically, the regulator has also had a blind spot for housing wealth, however as the recent retirement income review has shown, this is now changing.

“There is an obvious and increasing need for people to draw on housing wealth in retirement, so it is great news the fintech sector is developing solutions to meet this need.”

The report said that a breed of end-to-end, third-party operating models could deliver significant cost savings; create new and innovative business models; and generate new revenue streams for wealth managers and asset managers.

The report, Scalable Tech and Operations in Wealth and Asset Management, is based on insights derived from data and research from more than 33 major asset managers and 20 major wealth managers across Europe and North America. It also draws on data from Asia Pacific and the Middle East and Africa.

The report explores how evolving regulatory requirements and growing investor demand for personalisation is requiring wealth and asset managers to pursue digital and operating model transformations:

“Wealth and asset managers are faced with a myriad of challenges, and it’s clear that partnering with end-to-end, third-party operating models can yield benefits and create competitive advantage if done right, despite running counter to certain long-established practices,” says Akin Soysal, a BCG managing director and partner, and co-author of the report.

Rising costs

According to the report, the first step towards efficient and cost-effective transformation is understanding the current industry drivers—forces that are exacerbated by high market uncertainty and elevated interest rates. It said that despite largely favourable market conditions over the past few years, industry cost-to-income ratios (CIRs) have risen.

While larger asset managers witnessed a gradual increase between 2018 and 2021—with a rise to 74% in 2022—smaller asset managers with less than $300bn (£241m, €281m) in assets under management (AuM) saw a more pronounced increase to 78%.

CIRs for larger wealth managers have been stable at 71%, while smaller wealth managers, with AuM below $150bn, on average suffered a steep increase, of more than 82% in 2022.

While advisory fees have remained relatively stable, product fees have been hit by competition and increased cost transparency, with declines of 11% for active funds and 35% for passive funds since 2017. Asset-servicing margins for clients with more than $2m have decreased by 16% since 2017.

Client demands

The survey showed that technology spending has contributed to increased CIRs. The average share of technology in total operating expenses reached over 15% across both wealth and asset managers in 2022, up from 13% five years earlier. Over the same timeframe, IT spending has particularly been on the rise in application development (25%) and hosting (19%).

The report also found that client demands are steadily rising along the value chain, requiring wealth and asset managers to make further investments in areas such as hybrid-advisory, direct-indexing and managed-portfolio services. Clients are increasingly demanding full transparency of their investments to ensure alignment with their personal values and goals, such as sustainability.

The share of third-party technology spend has risen by more than 10% since 2018 and firms are turning to third-party technology providers to help them achieve their goals, the report found.

It said that firms are using third-party operating models to move parts of the tech stack to an end-to-end platform; outsourcing middle-office and operations functions; and pursuing a ‘best-of-breed’ approach, including seeking solutions from a range of different vendors, to gain flexibility and reduce dependence on a single vendor.

“Customer demands for personalised wealth solutions are steadily rising along the value chain, requiring wealth and asset managers to make further investments,” says Din Mustaffa, group chief strategy officer at FNZ. “It’s important to note that while most of these changes will require technology as an enabler, operating models will also need to be adjusted to navigate the shifting landscape in a cost-effective manner.”

The service has been developed by Virgin Money Investments, a joint venture between Virgin Money UK and Abrdn.

The digital investment platform and mobile app will offer Virgin Money customers investment opportunities.

The partnership builds on FNZ’s ambitions to open up wealth by making wealth management more accessible to more people. The aim is to provide all investors with tools and technology to empower them to grow their personal assets – regardless of where they sit on the wealth spectrum, and to provide investors with confidence to make smart decisions when it comes to managing their money.

Alastair Conway, chief executive of UK, Middle East and Africa at FNZ, said: “We are delighted to have partnered with Virgin Money to deliver this exciting digital investment platform. We have a vision of opening up wealth by providing wealth management platforms that make investing more transparent, accessible and personalized for everyone.

“Technology is at the core of this and pairing our capabilities with the team, world-class brand and distribution strength of Virgin Money will allow us to accelerate our mission and scale the delivery of our solutions.”

Jonathan Byrne, chief executive at Virgin Money Investments, added: “Through our partnership with FNZ, we’ve designed our new investment service to be accessible and straightforward for everyone – whether someone is an experienced investor or investing for the first time. It’s important that consumers feel confident enough to make the most of their money, particularly during these challenging times.”

The deal is subject to regulatory approval.

FNZ said the acquisition will strengthen its global proposition to both asset managers and distributors adding product, research, data and service solutions to its wealth management platform.

This will include broader access and expertise to serve alternative asset classes.

Luc Duarte, managing partner of Ifsam, will continue in his role and oversee the B2B fund platform’s direct relationships with more than 30 distributors and 300 asset managers globally.

Din Mustaffa, FNZ Group chief strategy officer, said: “We are excited to make another significant investment in Europe that strengthens our capabilities in the wealth management sector. The acquisition broadens our fund servicing capabilities and reach, particularly by expanding our footprint in the largest European fund hub and our coverage of alternative asset classes that are becoming an increasingly important component in servicing our partners.

“This acquisition reflects our continued focus on enhancing our client proposition, while bringing our innovative approach and technological investment to Ifsam’s excellent client base – we have been particularly impressed by the strong relationships the business has managed to establish with its partners. We look forward to welcoming our new Ifsam colleagues to FNZ.”