Your Turn: How Can Wealth Management Differentiate Itself?

I have a couple of questions specifically for those of you in the wealth management industry. I have been on the road a lot lately, talking with clients and prospects. Quite often, our discussions have centered around industry trends and comp170016-PB-Blog_03_22_17etitive pressures.

Recently, there has been a lot of discussion inside wealth management shops on the industry headwinds related to fee compression and transparency. The industry is experiencing
tremendous pressure on asset-based fees for investment performance and some of the major providers are responding with price cuts. This has led to a number of strategic discussions about wealth management value propositions and pricing strategies.

It’s easy to drop price as a way of competing; it is difficult to think of innovative ways to differentiate yourself. And it’s even harder to take on the risk of investing in that differentiation. Before making the leap to innovate, I suggest you ask yourself two strategic questions:

  • Where are we forcing compromises on wealth management clients? How can we break those compromises and create value for our clients?
  • As Clayton Christensen asks in his new book, Competing Against Luck, what “job” was wealth management hired to do?

I would love to start a conversation among my industry peers. These two questions may spur some interesting ideas on how to innovate and stay ahead of commoditization. I would love for you to share your thoughts by commenting below, and I’ll gladly join you in the conversation.