Do Wealth Managers Have the Tools to Confront Global Change?

As global forces reshape the investment landscape, wealth managers are confronting a crossroads. Faced with transformative technologies, shifting societal priorities, and increasing client demands for personalization and transparency, the industry is under pressure to rethink its strategies.

Insights from MSCI’s latest Emerging Trends in Wealth Management Report offer a roadmap for navigating this change, shedding light on the tools and mindsets wealth managers must adopt to stay competitive.

Four Megatrends Reshaping Wealth Management

MSCI’s report identifies four global megatrends that are creating ripple effects across the wealth management sector:

1. Transformative Technologies: Artificial intelligence, blockchain, and the Internet of Things are revolutionizing industries, enabling new efficiencies and redefining customer engagement.
2. Environment and Resources: Climate change and sustainability are no longer optional considerations for investors. They have become central to portfolio strategy, as clients increasingly prioritize investments aligned with environmental goals.
3. Health and Healthcare: Advances in medical technology and demographic shifts, particularly aging populations in developed economies, are driving demand for investments in healthcare solutions.
4. Society and Lifestyle: The rise of a middle class in emerging markets, such as China and India, is transforming global trade patterns and investment flows, creating new opportunities in sectors like consumer goods, real estate, and financial services.

Personalization: From Luxury to Expectation

Historically, personalization in wealth management was reserved for the ultra-wealthy. Bespoke portfolios catered to unique financial goals and values, but their complexity and cost restricted scalability. Today, advances in technology have democratized this capability, making it feasible to deliver tailored solutions across a broader client base.

According to MSCI’s survey of 220 industry professionals, 60% of wealth managers now view personalization as a non-negotiable expectation from clients. High-net-worth individuals (HNWIs) increasingly demand portfolios that align with their personal values, whether supporting the transition to net-zero or advancing better corporate governance practices.

Transparency: Building Trust Through Visibility

The modern investor demands more than just financial returns; they want to understand where their capital is going and how it aligns with their personal principles. This is particularly relevant as interest grows in private assets, which can be opaque and difficult to evaluate.

The survey highlights a marked regional divergence in this area. While wealth managers in APAC and EMEA are accelerating their incorporation of private assets, their U.S. counterparts lag behind. In APAC, 91% of respondents plan to increase allocations to private assets over the next three years, compared to just 61% in the U.S. This disparity may reflect the younger average age of HNWIs in APAC and their willingness to explore non-traditional investments.

However, transparency in private markets remains a challenge. Around 45% of wealth managers cite limited understanding of private assets as a barrier to higher allocations. Similarly, 52% flagged the illiquid nature of private investments, and 46% pointed to insufficient visibility into these assets.

Technology: The Great Enabler

Technology has emerged as both a driver and a solution for the changes sweeping wealth management. Digital platforms can aggregate and analyze vast amounts of market and portfolio data, enabling advisers to deliver tailored recommendations at scale. Yet, the survey reveals a gap between potential and reality.

Wealth managers widely acknowledge the importance of technological tools but find existing systems inadequate. For example, 45% of advisers report relying on manual monitoring of client portfolios, a process that is time-intensive and prone to errors. Meanwhile, 42% identify a lack of dynamic insights on taxes, risk, and other decision-making factors as a critical shortfall.

Furthermore, 39% of respondents highlight the need for a unified platform to manage all assets across portfolios. This includes not only traditional investments but also private-market assets, which require specialized analytical tools to provide clarity and confidence.

Balancing Opportunity and Risk

The wealth management industry stands at a pivotal moment. The convergence of personalization, transparency, and technology presents an opportunity to deepen client relationships and unlock new revenue streams. However, the same forces also amplify operational risks and expose gaps in existing systems.

“The demand for investment transparency has evolved significantly,” says Dhruv Sharma, Executive Director at MSCI Research. “Today’s wealth clients seek a deeper understanding of how their investments align with their values and financial goals. Simplifying complex data without sacrificing depth is the key to meeting these expectations.”

Joseph Wickremasinghe, also of MSCI Research, echoes this sentiment. “In private assets, wealth management firms can differentiate themselves not only through their investment offerings but also through education and tools that enhance client understanding. Frameworks to streamline due diligence or pre-vetted investment options can make these assets more accessible and appealing.”