What are the big mistakes wealth managers are making?
While the wealth management sector is embracing technology to transform their operations, are there still some major issues that are waiting to be addressed?
FinTech Global spoke to several WealthTech companies to get their thoughts on some of the biggest mistakes they believe wealth managers are making.
Isolated systems
For Yohan Lobo, Industry Solutions Manager for Financial Services at M-Files, the biggest issue is forcing wealth managers to use disconnected systems. This leads to information silos, which ultimately cause significant inefficiencies.
“Disconnected systems create information silos that hinder access to client and firm data, resulting in delays and missed opportunities. The absence of seamless integration between systems means inefficient workflows that stifle productivity. Disorganization hampers compliance; staying on top of regulatory changes without automation can be overwhelming.”
Another problem faced by firms is a reliance on manual processes. Despite the push for digitalisation, many firms are still plagued with outdated systems that require staff to manually enter information. Lobo believes this is a particular problem for areas like information capture, document management, and client collaboration. “It not only eats up time that could be spent on creating value but also heightens the risk of errors and data breaches.” Additionally, manual compliance checks are labour-intensive and error-prone, which increases the risk of compliance breaches.
“Ultimately, these inefficiencies limit the time wealth managers can spend on valuable client engagement, he said. “Firms can boost productivity, mitigate risks, and enhance the client experience by confronting these challenges head-on.”
To solve this problem, Lobo encourages firms to seek solutions, like that offered by M-Files, which can connect these isolated systems into a unified information layer. This can ensure all clients and firm data is centralised and easily accessible. In turn, this breaks down silos to ensure teams can better understand how content is used and where improvements are made.
When all of a firm’s data across all systems is connected, it can be classified and organised to improve accessibility and searchability, driving greater productivity and client outcomes. This supports teams across the whole business, such as helping compliance teams gain full context of a situation or a wealth manager being able to create improved insights and support for clients.
Lobo added, “Connected and classified information supports automated workflows, whether for document creation, client communication or regulatory compliance. This means advisors can focus more on client interactions and relationship building leading to better client satisfaction and loyalty.”
Finally, Lobo offered some advice for firms. Firstly, he urged them to find solutions that can connect and integrate with existing systems, such as Microsoft365 and CRM, to build a unified platform to manage client data and workflows. Secondly, he suggested firms invest in automation that can streamline operations and reduce manual work, to enhance productivity and allow wealth managers to prioritise creating value. Finally, Lobo recommended firms should put the client experience at the centre of everything they want to achieve and ensure any new technology supports this mission.
Manual workloads
Fredrik Davéus, CEO and co-founder of Kidbrooke, believes one of the biggest mistakes is an over reliance on manual/non-digital and expensive onboarding processes. On top of this, it is often coupled with non-personalised or irrelevant decision support, typically being too basic.
Davéus also highlighted another mistake, the inability to deviate a minimal amount off the scripted path. This rigidity, he explained, does not make for a good client experience and is typically a cumbersome box ticking exercise.
Technology is the key to resolving these issues, he explained. It can not only ensure the back-office processes become streamlined but improve the face-to-face customer engagements by providing more adaptability and value for clients. As an example, “Generative AI solutions coupled with financial analytics can empower advisors, wealth managers and customer service staff to meet and surpass client expectations,” Davéus said.
As for advice to firms, he said, “Invest in key long-term relationships with tech firms and create partnerships where they can help you grow your capabilities exponentially over time. Work on simple goals. Reduce the number of clicks and entries for compliance. Prove the value of the fact finding. Measure time spent on onboarding, and most important measure potential customers who quit on-boarding and do not come back.”
Fragmented data
As for Friedhelm A. Schmitt, Co-Founder and Co-CEO of Fincite, he outlined three key mistakes that currently plague wealth management: fragmented data, manual processes and inverse scalability.
He noted that wealth management has traditionally been built on expertise, trust and personal relationship, but now a new era has commenced. Client expectations are shifting to the digital world, caused by a changing market environment, easier access to a variety of asset classes and the generational transfer of wealth. This has created a pressure to innovate, Schmitt noted. However, increasing regulatory complexity and legacy technology stacks make it tough to adapt to the new norm.
He said, “Let’s be clear: it’s not that advisors are doing anything wrong. They are operating under structural constraints that are client-driven, regulation-heavy, and technologically outdated. The challenge is systemic and so is the solution.”
The first mistake Schmitt noted was fragmented data, with many having IT systems with client, portfolio and risk data isolated in disconnected systems. This issue continues to get worse during the market consolidation. “Every merger typically brings another core banking system and with it, another expensive and risky migration project. The result? A unified, efficient, and holistic view of the client becomes nearly impossible even though that’s exactly what clients increasingly demand.”
The second mistake is a reliance on manual workloads. While digital transformation has been a dominating trend for nearly a decade, many firms are still heavily reliant on Excel, PDFs and email. “Copying and pasting between systems, switching between screens and tabs this remains the norm, not the exception. This isn’t just inefficient and error-prone in a world shaped by self-service apps and instant experiences, it’s a clear competitive disadvantage.”
The final mistake Schmitt mentioned was a lack of scalability. Wealth managers are trying to extend the reach of their high-quality advisory services, which are typically reserved for the high-net-worth clients, but are failing to do so due to their technology limitations.
“Hyper-personalized advice is typically reserved for high-net-worth clients not because it’s philosophically exclusive, but because current processes and tools simply don’t scale. Ironically, the more clients a bank serves, the less often technology is actively used. Meanwhile, clients with smaller portfolios increasingly expect customized solutions too and they should.”
Fortunately, all these problems can be solved by technology. There are platforms available in the market, like Fincite.CIOS, which can help banks and wealth managers consolidate data, automate processes and provide personalized advice. Complex advisory scenarios, including estate planning and wealth structuring, can be supported digitally, while private markets no longer need to be managed by paper-based subscription forms and can be part of a fully digital reporting and transaction experience. Finally, data aggregation ensures banks can offer holistic overviews that include properties, mortgages and insurance policies calculating residual risks and net exposures in real-time, Schmitt explained.
As for moving forward, Schmitt offered a few bits of advice. The first is to embrace modernisation. “The real risk isn’t change; it’s stagnation.” Advanced technologies, like cloud computing, SaaS models and modular architectures are readily available and can provide firms with boosted efficiency and agility.
Secondly, firms need to recognise that technology is a value driver. Everything from digital onboarding and algorithmic portfolio optimisation through to interactive reporting, the quality of digital interactions is a main driver of client loyalty. “That means IT must be integrated into strategic planning, continuously evolved, and tightly aligned with business, compliance, and product teams.”
Finally, Schmitt urged firms to work with partners that are more than just software. “Every institution has its own DNA, different clients, strategies, and regulatory constraints. There is no “one-size-fits-all” solution in wealth management. Success requires configurable, modular platforms and technology partners who are willing to co-create, adapt, and support long-term transformation. At Fincite, we believe in empowering institutions to digitally express their uniqueness – not suppress it.”
Cold automation
Finally, Jurgen Vandenbroucke, managing director at everyoneINVESTED, often sees wealth managers are limiting their digitalisation efforts to cold automation. “They often treat technology as a substitute for human advisors, rather than as a tool to enhance human insight. This mindset reduces tech to a cost-cutting measure, rather than a growth enabler.”
This creates an impersonal, rigid system that fails to build trust or scale advice meaningfully. While clients want streamlined interactions, they aren’t exclusively looking for automation or easy access, Vandenbroucke explained. Instead, they want relevance, clarity and confidence.
As part of this, technology should not be seen as a replacement for a human advisor, it is there to amplify their reach and precision. Through this hybrid approach, a firm is better placed to expand their offering to reach more clients and ultimately help democratise access to quality financial advice. “This is where the real opportunity lies: scaling personalized advice, not just transactions. When tech is used to replicate human interaction, it falls short. But when it augments human expertise, it becomes transformative.”
He continued, “Imagine a system that learns from every client interaction and refines its recommendations. Or one that proactively flags life events and adjusts portfolios accordingly. These are not futuristic ideas—they’re achievable with today’s tools. At everyoneINVESTED we find applied behavioural finance our main motivation to enhance technology. The rich field of behavioural finance helps understand and anticipate investor behaviour. This yields sound methodologies that enhance investor risk profiling, understanding investment dynamics or building long term portfolios.”
Despite this opportunity, many firms are using “cold-hearted framework” based on static risk profiles or portfolio allocations. As a result, they miss the chance to engage clients dynamically and meaningfully, he said. With the cost of advice still high and the number of investors low, technology used correctly can reverse this. The cost of advice can be reduced, without impacting its quality and it can become much more accessible to investors.
Vandenbroucke encourages firms to rethink their digital strategies. “Don’t just automate—humanize at scale.” This means investing in platforms that can learn, adapt and personalise, and train advisors to work with technology, not around it. Firms should also measure the success of solutions through client outcomes, not cost savings. But above all, Vandenbroucke urges firms to remember that the future of wealth management is about being more connected, intelligent and inclusive and that is achieved through technology.
“The wealth management industry is at a crossroads, where embracing technology can lead to significant improvements in efficiency, personalization, and client satisfaction. By addressing common mistakes and leveraging tech solutions, wealth managers can stay ahead of the competition and provide exceptional service to their clients. At everyoneINVESTED we very much believe the goal is not just to digitise existing processes but to innovate and create new, more effective ways of managing wealth. Incorporating behavioural science insights can further enhance these efforts, leading to better client engagement and outcomes.”
