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Embracing Experimentation: A Path to Viable Future in Wealth and Investment Management

By 22 January 2024January 31st, 2024No Comments

“The enterprise that does not innovate ages and declines. And in a period of rapid change, such as the present, the decline will be fast”
Peter F. Drucker


Nearly Half of CEOs Question the Viability of Their Current Paths

According to a recent PwC survey, almost half of CEOs, a percentage that has increased since last year, express doubts about their company’s viability if it continues on its current trajectory. Additionally, the report highlights that 52% of companies from the year 2000 are no longer in operation. In the world of wealth management, many executives are voicing concerns that current fee and margin levels are unsustainable. This necessitates a shift in perspective, especially for those who aspire to maintain a leading position in the industry.

Where to Begin?

While quick wins can make a difference, the essential starting point for any business facing a potentially existential challenge is reevaluating its long-term sustainable client value proposition. This proposition should meet the following criteria:

a) A proposition that clients perceive as valuable enough to warrant payment.

b) An operating model that optimizes the combination of human expertise, technology, and outsourcing to deliver the proposition at scale.

c) A financial model where the costs of delivering the proposition at scale are lower than the fees clients are willing to pay, ensuring profitability and value generation.

The Urgency of Change:

Another report on wealth inheritance suggests that approximately 80% of Gen Z and Millennials are likely to change how inherited wealth is managed. This underscores the seriousness and urgency of the situation.

The Path Forward:

With numerous technologies, innovations, and ideas available, it can be daunting to determine where to start. Furthermore, ensuring that lessons learned remain valid until the point of benefit realization is a challenge. Therefore, it’s essential to return to fundamentals, as Elon Musk calls it, ‘first principles.’

  1. Client-Centered Value: In the world of wealth and investment management, the value (and associated fees) tend to be higher for client-centric propositions addressing not only investment performance but also social, emotional, or other needs. Conversely, commoditized propositions, such as index funds, offer lower perceived value and fees.
  2. The Decline of Human-Driven Processing: In the age of AI and advanced algorithms, human-driven processing is becoming an unnecessary cost. The value lies in informed opinions rather than manual implementation in digital transactions.
  3. Embracing Experimentation: Integrating these principles into existing business models is challenging, and the starting and ending points are often unclear. The current best practice, however, is to embrace experimentation. Try a few approaches aligned with the above fundamentals, analyze results, learn from failures, overcome barriers, and create customer or business value. Implement learnings selectively, continually experimenting until a long-term sustainable value proposition and operating and financial models are established.


In a rapidly changing landscape, hesitation can be detrimental. No matter where you are in your journey, taking control of your destiny through experimentation is the key to remaining relevant and viable. Failure to do so may leave you struggling to catch up.


Financial Simplicity works with select and progressive wealth and investment managers to make the process of experimentation of new and improved business models easier. With powerful portfolio management and control systems we can help firms experiment and experience new ways to look at their client proposition and operating models which in turn can assist with business case development and deployment. If this is of interest to you, get in touch

Stuart Holdsworth

Author Stuart Holdsworth

Stuart has over 30 years of experience in the use of technology for the strategic competitive advantage of businesses in the financial markets and investment industry.

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