–> This is a pre-event interview in the run-up to the Leaders in Finance Wealth Event on March 7, 2024.
Jeroen: Boudewijn, thanks a lot for taking the time to speak to Leaders in Finance in the run-up to the Leaders in Finance – Future of Wealth event on the 7th of March this year.
Boudewijn: Thank you as well. I am looking forward to it and I am excited to be a part of it.
Jeroen: Wonderful! First of all, could you please introduce yourself?
Boudewijn: I am Boudewijn Chalmers, I lead the Wealth and Asset Management Consulting Practice for EY in the Netherlands. Additionally, I am a member of EY’s global wealth management leadership team. Needless to say, I am excited about the topic of today on wealth management.
Jeroen: Yes, I can imagine. Have you been working in consulting all your career, or have you been in other places as well?
Boudewijn: Practically my whole career, with perhaps a couple of minor side steps. I have been in consulting for the past sixteen years. I spent time in the Netherlands and Asia and I have lived in Australia for seven years. I have had the opportunity to collaborate with clients across all continents.
Jeroen: That is great, you are bringing a very international perspective to the table. What in particular are you interested in and inspired by in your work?
Boudewijn: What truly energizes me on a day-to-day basis is collaborating with different types of organizations in the field of wealth management, both in the Netherlands and beyond. It is fascinating to observe each organization dealing with similar challenges but approaching them in diverse ways. This diversity is what makes the work exciting, and it also shows that the wealth management industry has a broad spectrum of approaches to supporting its clients and requires a diverse set of skillsets to be fit for the future. I enjoy engaging locally, but I also like the perspectives that come from outside the Netherlands. Our clients often express enthusiasm for learning from industry participants in other markets, whether it is in Switzerland, the UK, the US, or elsewhere, and vice versa.
Jeroen: When we look at wealth management in general, what would you say are the biggest challenges in wealth management for the financial services industry?
Boudewijn: There are several challenges, but I will try to focus on three of the key challenges in the industry. Firstly, there’s the challenge posed by the volume and rapid pace of change in the industry. The change is driven by factors such as regulation, a change in clients, demographics, intergenerational wealth transfer, and the rise of entrepreneurial wealth. Additionally, the emergence of new products and services, along with the reshaping of the financial adviser’s role through technology adoption. The second challenge is around talents; particularly the shortage of diverse talents entering the wealth management sector. This includes adapting to new expectations for the overall talent profile and addressing the general inflow of new financial advisers. Lastly, there is the overarching challenge of business model pressure and the ability to drive profitable growth. Sustaining the business requires addressing challenges of today while remaining relevant in the future by consistently adding value to clients. This must be done while recognizing the increasing complexity of operations, which currently exhibits a strong dependency on AUM (Assets Under Management) growth for overall profitability and profitability development.
Jeroen: One additional question regarding the second point, which focuses on talent. Is this different from challenges in other industries, or is this commonly observed across various sectors? Are there specific talent requirements unique to your area of expertise?
Boudewijn: That is a good question. Talent in general is a challenge in multiple industries, and for wealth management, the specific focus is on the role of financial advisers.
Historically, roles like private banker or investment adviser were popular, attracting a considerable influx of talent. However, there has been a shift in the dynamics of this role. Technology is increasingly supporting investment decision-making, altering the nature of the private bank adviser’s responsibilities. The emphasis now lies more on the EQ (emotional intelligence) side, with a greater importance placed on relationship management and understanding client needs. Furthermore, young professionals are often drawn to more tech-centric or fast-paced organizational environments. That is another element that plays a role, where I think the role of a private banker maybe does not always have the right profile and therefore does not always attract the talents it requires.
Jeroen: Thank you for elaborating. What would you say are the opportunities for the sector?
Boudewijn: There are numerous challenges, but there are also many opportunities to consider. One of the significant opportunities lies in the adoption of technology, AI, and related areas to enhance the delivery of value to clients. This isn’t solely about simplification but rather a concentrated effort on delivering substantial value to clients. Partly driven by the same is scaling the actual wealth management and service proposition around financial advice. And the last point that I want to call out here is the expansion of the holistic view on wealth management by placing a broader emphasis on market developments, such as the increasing prominence of the pension transition when it comes to wealth management in general.
Jeroen: You already mentioned tech a couple of times during this conversation. Would you say the wealth management sector is aligned with the latest developments, lagging behind, or positioned somewhere in between?
Boudewijn: It depends. There is a considerable amount of activity in terms of technology within wealth management. It has never really been a front-runner, I would say. If you look at the broader financial services sector, you might find more technological and agile developments in payments and retail banking.
However, you see developments within wealth management as well. In the past, we have spoken about robo-advisers being the next big thing. While it may not have entirely lived up to the initial hype, it did trigger a shift in thinking about technology in the industry, providing valuable lessons. Some organizations have indeed grown quite significantly in that space. Regarding technology’s overall role, as I may have mentioned earlier, it is crucial for the industry. While wealth management may not be at the forefront, many organizations are actively engaged in various technology initiatives. Some focus on the technical aspects, while others take a more strategic approach. The option of AI cannot be ignored, and I expect a lot of discussions on this topic during the event.
However, the adoption is occurring at a certain pace. Additionally, any technological adoption is dependent on factors like regulatory requirements and adoption by clients.
Jeroen: You have discussed several significant trends and subjects such as technology and the pension transition. Regarding sustainable finance, which is a crucial topic for the entire human race, let’s delve into its specific importance for wealth management. How important is it?
Boudewijn: It is obviously a very interesting one, given the widespread acknowledgment of the importance of sustainability. However, there are differing perspectives on how clients perceive its significance. Many firms are stating that their clients do not care as much as research suggests.
Nevertheless, it’s a reality we cannot ignore, and adoption is inevitable.
Another aspect is the internal focus within wealth management firms and private banks. Our own analysis indicates that there is more to be done to get the internal organization mobilised on this topic as well. Until advisers can effectively articulate to clients why identifying their preferences in the context of SFDR (Sustainable Finance Disclosure Regulation) is essential, I think we can say that we still have quite a way to go. This is just one example highlighting that there’s ongoing progress to be made on relatively fundamental aspects within the industry.
Jeroen: The last question from my side. Regarding your participation in the Leaders in Finance Future of Wealth Management event. Specifically, what aspects or individuals are you particularly interested in? What are the things you are looking for at an event like this?
Boudewijn: I look most forward to the variety of the discussions; there are many different topics to be covered. I am excited to engage in conversations with real leaders in the industry. Facilitating one of the panels, with a focus on pensions—a topic I have previously mentioned—adds an extra layer of excitement. The evolution of wealth pensions in the context of changing industry dynamics is a crucial but often underrated aspect of the overall wealth management proposition. I look forward to connecting with industry participants, meeting many familiar faces, and making new connections. I think it is a great set-up altogether, so I can not wait!
Jeroen: We are very excited that you are supporting us here as well as joining us and playing an active role, as you stated yourself, at the event. Thank you so much, Boudewijn Chalmers Hoynck van Papendrecht, for taking the time to speak with Leaders in Finance. Again, I am looking forward to having you there on the 7th of March this year. Thank you, Boudewijn!
Boudewijn: Perfect, thank you! I am looking forward to it.
–> Luister ook naar een extra Leaders in Finance podcast aflevering met Boudewijn over Wealth Management: volg deze link.
–> This is a pre-event interview in the run-up to the Leaders in Finance Wealth Event on March 7, 2024.