Can bespoke wealth management be scalable?

http://www.citywire.co.uk/wealth-manager/can-bespoke-wealth-management-be-scalable/a483592?ref=wealth-manager-latest-news-list

This inherent dilemma is becoming more apparent as businesses face the growing costs and hurdles associated with regulation.
David Lough, chairman of Heartwood Wealth Management, argues that over the past 25 years advances in technology and thought have been applied to investment management, helping to create economies of scale.
Speaking at the CISI Wealth Management Conference, Lough said: ‘What I want to suggest to you is that the story of the past 25 years has been the application of thought and technology and through this there has been scaling into investment management solutions.
‘Most organisations have moved from a world of individually customised portfolios to a range of solutions, strategies, models – call them what you will. They are better researched, better tested and more consistently applied, so we move from a range of dispersed outcomes to much more predictable outcomes for clients who share the same characteristics.’
Making financial planning scalable
Lough anticipates the same dynamics could result in a more repeatable process in relation to financial planning through the use of software applications. ‘What I am suggesting is the story of the next 15 years is going to be the same sort of change in the wealth structuring and financial planning fields. I hope this will soon apply itself to retirement planning,’ he said.
He adds that wealth managers face a challenge when assisting their clients, who are in need of solutions for what could be a 30-year retirement. But he says these solutions need to be consistent and acknowledges that making financial planning more scalable is not without its challenges. First, there is no institutional precedent for personal retirement planning, he says, and second there are more variables, particularly in relation to estate planning.
Jonathan Fry, private wealth director and former Wealth Manager cover star, also anticipates the development of software is likely to enable firms to ‘deliver more planning and need identification’, particularly for younger clients. However, he is more sceptical about the use of software applications for clients with more complex arrangements.
Nonetheless, he agrees the dilemma of achieving scalability is a key challenge for the industry. ‘When it comes to the issue of scalability there is a natural tension between doing something that properly reflects a client’s needs and producing this efficiently and cost effectively,’ Fry said.