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We will remember 2020 for COVID-19, how it permanently changed the ways customers seek advice, and how financial advisors dispense it. As the lockdown began, consumers did not have access to a physical branch or office, did not know what investment decisions made sense, and lacked access to customer service or support. Wealth management firms predicted it was time to embrace digital to thrive in the ever-evolving “new world” entered.

These challenges exposed underlying gaps and customer pain points that existed prior to the pandemic. Solutions, however, have been hiding in plain sight. Innovative wealth-tech firms are using digital technologies to drive better digital experiences for customers and more efficient ways to receive financial advice. They include digital onboarding that allows customers to open and fund a new account in less than five minutes and digital servicing that allows customers to connect short-term financial wellness with longer-term financial goals.

Beyond the pandemic, environmental crises such as wildfires in the western United States and global social unrest highlighted the importance of sustainability. Environmental, social, and governance (ESG) is an increasingly common topic in client conversations. Consumers now include addressing climate change and supporting social causes in their investing agenda. Forrester sees ESG playing a significantly larger role in wealth management in 2021 for retail investors, wealth management firms, and portfolio managers. Sustainability has thus far been a point of differentiation. In the years to come, it will be table stakes.

For most wealth management firms, capitalizing on these trends will enable them to acquire more customers. But in a world where fees are racing toward zero, achieving profits will remain challenging for firms that offer only a limited set of products and solutions to their customers. Wealth managers will have to expand their product offerings to remain relevant and profitable.

Planning ahead in financial services is difficult in any circumstance, particularly in a pandemic. But one thing is certain: Now is the time to use the momentum that 2020 has brought to digital acceleration to reshape the future of your business.

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