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- Survey shows focus on rising costs and regulatory challenges
- Market structure providers offer vital support to wealth managers
The wealth management sector is facing severe challenges around rising back-office costs and regulatory burdens. According to a recent study, a majority of wealth management firms will prioritise improved operational efficiency and client asset protection in the next 12 months. The survey – commissioned by Clearstream – highlights the edge that state-of-the-art external service providers can supply to fund managers. It was conducted by Goodacre, a specialist consultancy for the securities industry in the UK.
When presenting Clearstream's November figures, Co-CEO Philip Brown underlined how the company's product and service offerings are helping the wealth management industry overcome the headwinds arising from new regulations as well as high processing and operational costs. “As a solid market infrastructure provider, we are committed to support wealth managers in meeting their objectives with regards to operational efficiency and risk mitigation," Brown said. "Thanks to best-in-class operational models – including asset segregation and delivery versus payment settlement – we ensure the highest standards of safety for our clients’ and their clients’ assets.”
The key findings of the survey included the following points:
- A majority of survey respondents stated increasing regulatory pressure and escalating costs as the main obstacles to overcome in the future.
- The continuing increase in regulatory requirements, a lack of investment into the post-trade area and often highly manual processing hubs have led wealth managers to apply a much greater focus on potential risk exposures and inefficiencies embedded in parts of their current operational models and custody networks.
- More than two thirds of survey respondents stated that using a single custodian and fund processing provider for all asset classes could lower costs and generate efficiencies. Enhanced customer asset protection was also seen as a benefit of using a single provider.
- Survey results also indicated that post-trade processes will likely become an outsourced utility and replace most of the current ‘back office’ establishments which still rely on highly manual processes. Such setups can free resources to focus on business expansion rather than operational processes.
With financial regulators monitoring fund processing and asset protection ever more closely, wealth managers and other buy side customers are increasingly looking for best-in-class third party fund custody services. Clearstream's Vestima suite of investment fund services provides wealth managers with a state-of the-art solution delivering full automation across order placement, delivery versus payment settlement and custody.
Please find the full study "The Wealth Landscape: The Manager’s Perspective" attached to this page.
Further information about Clearstream's Vestima suite of investment fund services can be found at www.clearstream.com.
