Trends in finance change, especially in wealth management, which is currently experiencing Great Wealth Transfer. Nevertheless, as an external asset manager, you need to keep up with them. We want to help you: in this article, you will find the most crucial current trends you should know about.

5 Most Important Wealth Management Trends from the Perspective of an External Asset Manager

So, what do you need to consider as an external asset manager? Take a look at our list below.

Personalization of Client Services

Clients today expect more than just general investment strategies. They are looking for personalized advice and services that cater specifically to their individual financial goals, risk tolerance, and values. For EAMs, offering tailored solutions is not only a way to differentiate their services but also to build deeper, more meaningful client relationships. This means that you will need:

• Customized portfolio management and reporting.
• Behavioral finance tools to predict client preferences and needs.
• Real-time, personalized communication to keep clients engaged and informed.

The Integration of AI and Machine Learning

AI and machine learning are becoming essential tools in wealth management. They enable external asset managers to optimize their operations and improve decision-making. These technologies serve a plethora of functions, from collecting and analyzing vast amounts of customer data to improving your algorithmic trading mechanisms and basing them not only on the information directly from the trade stock markets but also the open web.

Sustainable and ESG Investing

Sustainability is no longer a niche trend—it’s now a central part of many clients' investment preferences. EAMs are increasingly incorporating environmental, social, and governance (ESG) criteria into their investment strategies, as clients seek portfolios that reflect their values without sacrificing returns.

This means that you need to be able to locate profitable ESG investments and navigate them (as the laws regarding such investments might vary). At the same time, understanding the appropriate level of focus for each client’s ESG preferences adds complexity to the role of an external asset manager.

Automation in Compliance and Risk Management

With growing regulatory demands, ensuring compliance is a top priority for EAMs. Digital platforms now offer automated compliance solutions that reduce the risk of human error and improve efficiency. This automation is crucial for tasks such as:

• KYC, 
• AML checks,
• transaction monitoring,
• generating audits for future regulatory reviews.

It is the key to avoiding mistakes and improving productivity, hence its popularity.

Data Security and Client Privacy

Cyberthreats evolve constantly, and so must the tools used by each external asset manager. Thus, one of the trends we observe is a rise in investments in data security and client privacy measures. From cloud computing to selecting the finest databases and even a turn to blockchain technology—this area will surely remain a priority in the wealth management industry for the foreseeable future.

The Takeaway

The above are the five most critical trends any external asset manager should know about. They shape the wealth management industry, and each trend has a valid reason behind it. Thus, do not overlook them; instead, try to follow them by making smart investments in the right tools and platforms.