Significant changes have transformed the wealth management industry in recent decades. The first decade of the 2000s saw the further democratization of trading because of increased access through technology, and the current decade has seen the convergence of banking and investing, and the rise of fee-based managed accounts. What might the next 10 years bring?

Researchers at McKinsey & Company recommend in a report that industry keep an eye on these trends:

• Asset control changing: The "face" of the consumer is changing as women control more assets; Millennials and Gen Xers gain control of more assets; and participants in the expanding gig economy increasingly need new approaches to protection and retirement planning.
• Needs shifting: Customer needs are shifting away from risk-based portfolio construction to outcome-based planning across multiple dimensions.
• Expectations rising: Client expectations are rising rapidly for things such as virtual engagement, seamless apps experience, omnichannel support and instant payment, at a pace set by industries outside of financial services.
• Tech progressing: Rapid technological progress enabled by the proliferation of data is reshaping value chains across industries, bringing more automation and efficiency and, in turn, changing the nature of work performed by humans.

These trends and others will lead to a meaningfully different wealth management industry by 2030. The decisions that wealth managers make today will set the stage for the demands of the future. The writers of the report make these recommendations to address these challenges:

• Make approaches engaging: Drastically clean-sheet advice and engagement models and deploy more hyper-personalized, data-driven and engaging approaches.
• Use data to gain insights: Heavily invest in and build customer-insights engines, developing a comprehensive view of clients at the home-office level, including leveraging third-party data.
• Develop talent pool: Rapidly launch recruiting and upskilling programs, and develop a talent pool geared toward the future.
• Use tech to transform: Radically transform mid- and back-office, leveraging advanced technologies to achieve operational excellence.
• Keep an eye on consolidation: Vigilantly monitor for consolidation on the horizon, and be prepared to join forces with competitors to harness synergies.

"The North American wealth management industry will undergo meaningful shifts in the next ten years, influenced by evolving customer segments and rules of engagement, rapid technological advance and shifting competitive dynamics," the report concluded. "There are challenges and opportunities on the horizon. Those wealth management firms that rise to the occasion and embrace the change will be in a position to thrive."