Aite's Stephen Wall: wealth managers hide their heads in the sand when it comes to digitalisation

Aite’s Stephen Wall: wealth managers hide their heads in the sand when it comes to digitalisation

The wealth management industry needs to shake off its “cottage industry” mentality of the past and realise that it is “do or die” in the push to digital.

This was one of the key messages from yesterday’s (24 November) Objectway International Customer Conference in Amsterdam – a one-day event of presentations and insight from the Italian firm and its partners.

At a session on “Digitalising wealth management: the time has come, are you ready?” Stephen Wall from Aite Group, said the sector in the past was hampered by an insulated mentality – like a “cottage industry” – and with “not a lot of change”.

While the industry is waking up to digital, some parts are slow to react and complacent. In Wall’s view there are “no chances anymore and it is do or die” in going full digital.

You may argue that everybody should know this already, but in a survey of 26 wealth managers carried out by Aite, 75% were delivering the first round of digital initiatives. So the remainder are clearly not up to speed.

As Wall noted, from 2007 to the present, there have been a wave of new entrants into the sector, which means the “juicy lemon is now being squeezed as there is more pressure on wealth management”.

Aite spoke with 19 firms who are doing sandboxes and engaging with start-ups. This is one solution to the problem. Sandboxes are very popular across the fintech world at present, and may have given food for thought to the 150 or so attendees.

Van Gogh Museum

Van Gogh Museum

People in suits in museum

This was Objectway’s second international customer event (the first was in London last year) and it took the opportunity to showcase a new branding and new products.

On the evening of 23 November, at the superb Van Gogh Museum, we were treated to a guided tour and the unveiling of the new branding and logo.

On the main day (24 November), Peter Schramme, Objectway’s lively and witty chief business development officer, revealed its range of new products.

Brand new logo revealed

Brand new logo revealed

These include Optimo – for model portfolio construction; Sure – a suitability rules-based engine which covers MiFID II; and Hybrid Advisory – which allow customers to start their investment experience online and later decide to continue with a personal advisor.

To give you an idea of the company’s size, Schramme says Objectway manages €1 trillion in wealth, and serves 150 clients in 15 countries.

Stick around

Schramme too was keen to emphasise the importance of digital for wealth managers in “building a “sticky relationship” with their customers. “How do you differentiate in an increasingly commoditised business?” he asks.

To begin with, wealth managers have to think how to attract customers into their “ecosystems”, he says. For this, owning the first contact point is important. And, of course, they have to ensure that the client is “activated and engaged”, he states.

Easier said than done! Schramme believes that pinning all hopes on technology is not the right approach. “You’ve got to turn the process upside down. You have to start with thinking from your client’s point of view, and not with systems,” he states. “Think about and understand what customers want, how they want to interact with you and so on. And only then build the technology environment.”

The UK way

There is also a focus on the greater integration of the solutions Objectway offers. The company has grown largely via acquisitions, so there is a need to bring together disparate systems.

For the UK market, for example – where the vendor acquired 3i Infotech’s business in 2014 (Rhymesight, Fiscal and Altimis) – Objectway promises an integrated front-to-back office solution. Rhymesight’s well-established back office system, Quasar, is being integrated with Objectway’s eXimius portfolio management solution as well as with Objectway Conectus for digital channels.

Nedbank Private Wealth, a long-standing user of Quasar, is in the final stages of the eXimius roll-out. The bank is the first among the Quasar user base to embark on the project and others are likely to follow.

Quasar has about 30 users in the UK, including Friends Life, Rathbone, M&G, HBOS and Jupiter. A handful of clients – Barclays Wealth and Coutts among these – left prior to the Objectway arrival, but none have deserted since the acquisition (to Banking Technology’s knowledge).

CheBanca! shares its experience of using Objectway tech

CheBanca! shares its experience of using Objectway tech

Sneaky peeky

While the event is targeted at its customers, the testimonials from CheBanca! (the largest user of Objectway’s robo-advisory solution), Investec (which implemented Objectway’s eXimius portfolio management system in 2009) or Rabobank (another flagship user of eXimius) were pragmatic and logical. Nothing was over the top in terms of endless and undiluted praise.

Elsewhere, there was a sneak peek at an exclusive Efma – Objectway Survey “Digital Engagement and Collaboration”. This asked 22 questions to 2,000 financial institutions from across 27 countries. As Barbara Gentile, Objectway’s marketing manager, said – it is the industry’s “current state of mind”.

There are way too many stats to relay from the 40-page report, but a few snippets are worth sharing.

In terms of assets under management (AUM), 19% said more than $50 billion, while 26% (the highest percentage) said “don’t know”. Perhaps it’s time for those people to find out?

Concerning a digital strategy, 46% of the respondents said there is a “board level commitment with a strategic focus”. Next was 22% – with a multi-year programme and multi-year budget.

For the long-term “sweet spot” of online investment, 71% said a hybrid advisory model. A very clearer result, yet 15% had no clear opinion. Only 10% believed it would be an automated robot model.

An interesting and easy-to-read survey. I’d recommend getting a copy if you can. (You can’t have mine.)


The event went well and Amsterdam was a great choice. The relaxed vibes and friendly people in the city made it a smooth (or “fluid”) affair.

The stats were also welcome as they give a useful insight into current trends in the wealth and investment management sectors.

Most of Objectway’s clients are still in Italy, but with its new image and products unveiled this month, it is clearly targeting 2017 as a time for massive growth. Let’s see what happens next year.