This gives their systems a leaning towards the cumbersome, the limited and the expensive — which they then regret.
Using technology to improve the client experience is rarely the first thing that comes to mind, in part because most of the firms think their clients have a limited appetite for it, believing that most prefer contact with a human.
Given that the average client is well over 50, they may have a point but less so perhaps than they think because asking the clients tends to produce a different answer.
Though it is true clients do not want to spend their life in conversation with a robot, they would rather like to be able to get regular portfolio updates and a lot more, preferably on their mobile and at times and places convenient to them.
They would prefer simply to email in a photo of their passport page, a pay slip and a utility bill, to become a client, rather than have to fill in a 30-page questionnaire.
It is also a generation thing. Most wealth managers are pretty inept at attracting young people, unless they are the sons and daughters of existing clients, though UBS is making serious efforts with its SmartWealth app.
Its target is what is now known as the Henry — not the noisy vacuum cleaner but an acronym for High Earning Not Rich Yet. In other words, people whom they expect to do well as they get older and want to sign up early.
But there remains a huge gulf between the technology which wealth managers are prepared to embrace and what people in the fintech industry think they should do.
This interestingly plays to the theme of a paper just published by Antony Jenkins, who was briefly the reforming chief executive of Barclays and who is now enjoying a post-defenestration career in fintech.
His thesis is that most managements are insufficiently bold when it comes to technology and, as a result, the industry is plagued by incrementalism — small isolated projects which work as far as they go but lack the ambition to make a big difference.
His message — aimed at banks, but just as relevant to wealth managers — is that innovation is not the same as transformation. Innovation is often actually just playing safe.
Achieving the big wins from technology will require a radical change in managerial ambition and boldness, and it is long overdue.
The bottom line, though, is that if the wealth managers don’t seize the moment, someone else will seize their clients. The industry has long had a sheltered existence and, like so much of financial services, it has been producer led, doing what it wants to do and expecting the client to tag along.
As a business model it has served them well for a long time, but the survivors will be those shrewd enough to realise it is not going to work for much longer.
