Wealth Managers and Insightful Data: Overcoming Digital Transformation, Personalisation, and Regulatory Challenges

Wealth managers are under tremendous pressure to successfully navigate an ever-changing landscape. From adapting their digital experiences to serve a new generation, delivering a hyper-personalised service, and responding to complex financial regulations, this confluence of market challenges requires innovative, streamlined strategies underpinned by accurate, transparent, and insightful data.

As Director of Client Solutions, Anastasia Georgiou champions the voices of wealth managers and the wider market within Morningstar. It’s no surprise then that Georgiou is the go-to expert when it comes to developing solutions that enable wealth managers to adapt and evolve.

“The best wealth managers are focused on their long-term strategies, which ultimately benefits their end clients. While there will always be nuances that vary depending on the wealth managers or firms, the broad sentiment across the market is that to remain competitive, they need one critical thing – data.

Whether it’s investment data, ESG and climate data, personal customer data or bespoke data analytics, they need access to deeper, high-quality data to respond to the demands of the market. By diversifying their data, they’re able to accomplish so much more – whether it’s portfolio analysis, monitoring fund performance, diving deeper into investment research, or gathering the most up-to-date information about financial regulations. It’s really the foundation for both their day-to-day operations and long-term success.”

But to deliver successful solutions, you first need to have a thorough understanding of the challenges. For Georgiou, everything starts with a challenge.

“If you spoke to every wealth manager in the market, I’m sure you could come up with a thousand challenges. But as I’ve listened to the market and seen first-hand how things have developed, I would say there are three core challenges that every wealth manager needs to grapple with: digital transformation, personalisation, and compliance.

When it comes to digital transformation, there are internal and external considerations. Internally, firms need to ensure they have the technology to deliver a truly first-class service. So, integrating their tech stacks or developing self-service platforms. While they require huge volumes of data to do this, they also need the data to be delivered and structured in a way that makes it accessible.

This leads quite naturally into the challenge of personalisation. We’re currently in the midst of a huge transfer of generational wealth to millennials and Gen Z, and their demands are uniquely different from previous generations. Younger generations expect a digital-first experience, whether it’s a hybrid advice model or those self-service platforms. This is where data comes in. Wealth managers are combining their client's data and preferences with investment data to deliver personalised solutions and experiences.

Younger generations tend to be incredibly ESG and climate conscious. To retain these clients, wealth managers need high-quality ESG and climate data to demonstrate that these factors are important to them, and that they’re actively considered throughout the process. For example, does this investment fund meet a client’s sustainability preferences, or are there investment opportunities that divert away from controversial products? Wealth managers who can demonstrate – through good data – that they’re aligned with their client’s objectives are better positioned to succeed.

Finally, new financial regulations represent a significant challenge for wealth managers. In the United Kingdom, there are a range of regulations, from Consumer Duty to the Sustainability Disclosure Requirements (UK SDR). Across the European Union, Sustainable Finance Disclosures Regulation (SFDR) has dramatically increased transparency around sustainability. Wealth managers need quality data to meet their regulatory requirements and remain compliant. But going further, they need transparent data to effectively communicate the impact of these financial regulations to their clients, especially when ESG and sustainability are involved.”

Unique challenges require unique solutions. For Georgiou, it’s here that Morningstar’s strengths become apparent.

“We offer clients access to incredible volumes of deep data. But data on its own can only tell you so much. Truly impactful and effective data is combined with a compelling narrative that offers context about where you are and where you need to go. At Morningstar, our data is made even more powerful through world-leading investment research and proprietary metrics. These granular insights help our clients to dig deeper, and it’s how we help wealth managers adapt to those three core challenges.

Our datasets are incredibly comprehensive, covering investment funds (such as ETFs, and life and pension funds) to stocks and bonds. This data is then enhanced through first-class analytics that really offer a holistic overview of a particular investment fund or universe.

So, whether it’s our Morningstar Medalist Rating, which assesses a fund through qualitative and quantitative methodologies, and draws on various pillars to arrive at an overall decision, or the Morningstar Portfolio Sustainability Score, which measures the level of ESG risk within a portfolio, the data is bolstered by these supplementary insights.

Through Direct Web Services APIs, wealth managers can then integrate our high-quality data into their workflows, build custom investment experiences, and help their end clients independently and proactively manage their portfolios to deliver a top-tier digital experience.

When it comes to personalisation, more enriched data is key for wealth managers to derive meaningful insights tailored to their clients. With Morningstar Direct, for example, you can screen a fund for the metrics that matter, from ESG risk and top material ESG concerns to the controversy level, so you can ensure your client’s portfolio is aligned with their preferences. While clients may have a clear idea of how they want their portfolio to be constructed, large volumes of data can confuse them. That’s why we offer comprehensive reporting services, so wealth managers can surface these insights through easy-to-grasp visualisations and graphics, enabling their client to make more informed decisions.

Proactive engagement with ESG and financial regulations is a core strength of ours. We continuously expand our ESG data and product offerings to stay ahead of evolving requirements. Together, our analyst and product expert teams extensively research these new regulations, to make sure we have a deep understanding of the rules and their potential impact. Through this, we ensure our clients have the resources to meet their compliance needs but also provide wealth managers with a solid foundation of high-quality, insightful data, effectively demystifying the path to compliance.”

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Anastasia Georgiou has not received any cash or non-cash compensation from Morningstar in exchange for this story.