“Those who are happiest”, said world-renowned intellect Booker T. Washington, “are those who do the most for others”.
Scattered throughout world philosophies are similar ideas. From proverbs about old men planting trees to today’s chart hits, the message keeps repeating – money doesn’t buy happiness, contributing to a greater purpose does. Perhaps ironically, the place we see this most is in Wealth Management. Since 2018, the money flowing into Environmental, Social and Governance (ESG) funds has increased ten-fold. And in 2021 it’s set to double again. People want to invest in companies that do good. It’s so important that they’d even be willing to sacrifice some returns if they had to.
So how can wealth managers boost client and employee happiness using ESG? And how can they enjoy this $171 trillion market without greenwashing? Our Marketing Director Lucy Heavens recently spoke to technology experts to discover more (click here to watch the replay).
Ever wanted to suss out when an investment manager last went to university or studied up? Try asking whether investments that do good can also do well. The evolution of different responses over the decades is fascinating.
At its origins, some seventy years ago, ESG or “socially responsible” investing, didn’t have much to do with investing. For the most part, portfolios excluded weaponry, gambling, pornography or sometimes alcohol. And perhaps – if the investor was ultra-philanthropic – some proceeds would go to charity. This separation of doing good from doing well held strong for decades. Sadly, some old-school managers still adopt this dinosaur way of thinking.
“Where I see a divide is when it comes to family offices and billionaires”, comments Lou Celi, Chief Executive and Founder of ThoughtLab. “Whether you keep your investment portfolio separate from your corporate altruism or philanthropy … that kind of thinking has to stop and change. I don’t think that’s contemporary thinking anymore”.
Of course, for most people this is clear. Charitable gift-giving has nothing to do with ESG investing. After all, donating money to protect wildlife does nothing when the money comes from oil drilling, deforestation, or plastic pollution. Sustainable investments – by definition – are not just about the planet, they must sustain themselves financially too.
This brings us to the modern way of thinking – which wealth managers must adopt. ESG investments can deliver similar or better financial returns than traditional ones. For some time, managers debated this back and forth like a game of ping pong. But in 2020, the argument was finally put to rest. ESG investments are more resilient against market volatility and offer stronger returns overall.
This success is partly thanks to the “ESG factor”. Investors love buying and holding what they believe in, and that makes ESG sticky. By contrast, investors can feel cognitive dissonance when they invest in things that they don’t believe in. For example, stocks that damage the planet or hurt future generations of their family. These don’t have the same sticking power, and investors won’t think twice about ditching them if they need to. It’s purely business. Nothing personal.
“This success is partly thanks to the “ESG factor”. Investors love buying and holding what they believe in, and that makes ESG sticky. By contrast, investors can feel cognitive dissonance when they invest in things that they don’t believe in.”
“We’ve seen the rise of purpose over the last few years”, elaborates Olivia Fahy, Head of Culture for TCC Group. “Five or so years ago, it wasn’t really something that was mentioned in the same sentence as financial services. It wasn’t really something on people’s radars. And in the last few years, it’s grown exponentially”.
Another reason behind outperformance of ESG falls on regulators. As scientists issue code-red warnings, governments and supervisors have no choice but to tax heavy carbon emitters and reward sustainable companies.
“There’s a lot changing on the regulatory landscape”, continues Celi. “Some of these trends are more pronounced in different parts of the world. Japan, France, and the US are where we’re seeing the most ESG-driven activity. France is very far ahead with regulations, that can even affect lending rates”.
The EU is a leader in the space. As part of the Green Deal, the Commission hunkered down on financial services to end greenwashing and promote genuine sustainability. And it’s only getting more serious. “We see the EU centralising agencies”, explains Nina Kerkez, Director of Consulting at Lexis Nexis Risk Solutions. “Moving from multiple supervisory agencies to potentially one centralised agency”.
From the EU Taxonomy to the expanding carbon markets, things are going to get expensive for non-sustainable companies, leading to a rise in stranded assets for investors. Clearly, this affects all wealth managers, even those outside Europe. As Celi found in his research. “Because many of the firms […] are international, they’re all affected”, he shares.
Type, “How to tell if a company is greenwashing” into Google and you’ll get five million nine hundred results. Customers are getting smarter. What’s more, less than one in five believed brands’ sustainability claims last year . How can wealth managers avoid unintentionally greenwashing to a hyper-sceptical customer-base?
For Fahry, the answer is clear. “It’s important for firms to be practicing what they preach”, she comments. “It isn’t enough for firms to be making commitments externally and saying these things. They actually need to be following through with it and applying these actions and behaviours within their own organisations”.
This may seem like an obvious first step, but sadly, for many firms it isn’t. Wealth management is still among the very worst for diversity and inclusion levels , showing a lack of engagement with the “S” and “G” in ESG. What’s more, while banks have made bold sustainability claims, many have been caught out for climate hypocrisy– destroying the “E” in ESG . Even the FCA has raised eyebrows at the quality and integrity of ESG investing services . These incidents damage their reputation, and not just in the eyes of the customer, but the employees too.
“Values are more important than we’ve realised. Finding out precisely what clients believe in is key to delivering exceptional service – which wealth managers can justify charging more for.”
“Reputationally, that focus on the behaviours you’re driving throughout the organisation is really important”, Fahry elaborates. “If you want to create an organisation that is healthy, you need to create the environment and culture that allows those sorts of healthy behaviours to thrive”.
On the flip side, research from McKinsey found ESG can play an essential role in nurturing employee happiness. “A strong ESG proposition can help attract and retain quality employees, enhance employee motivation by instilling a sense of purpose and increase productivity overall”, the paper reads.
Values are more important than we’ve realised. Finding out precisely what clients believe in is key to delivering exceptional service – which wealth managers can justify charging more for.
Everyone has a different version of ethical investing. Or, as Celi puts it, “There’s not one single purpose. It varies from person to person”. To make clients truly happy, and offer them a portfolio that sticks, wealth managers must find out what their client’s unique purpose is.
“If you’re a good wealth manager”, elaborates Celi, “you need to know what [your client] cares most about”. From there, you can build an investment solution which makes them happy.
To do this, of course, wealth managers need data. Compiling all this data – from recorded meetings to client notes – into meaningful insights can only be done at scale with technology. And with the right client lifecycle management solution, the burdensome regulations and checks become painlessly completed too. This, all the experts found, was the only truly manageable way to meet the exacting standards required for ESG investing.
“Firms are going to be increasing the digitalisation of compliance, to cope with regulatory complexity”, explained Celi. “58% are planning to digitise, automate, integrate compliance controls. A mixture of technology and humans is needed to get the job done”. What’s clear is that humans have an essential role to play, not just in bolstering client happiness but also saving the planet. There are humans behind everything. It’s a hybrid approach. We need super technology, but at the epicentre is the human. Technology training and human interpretation is vital.
The OECD found that we need to be investing $6.9 trillion each year from now until 2030 to stand any chance of reaching our net-zero goals . More than the entire GDP of the UK.
The widescale adoption of Compliance and ESG technology – as well as the human training – cannot come soon enough. Financial services have a heavy burden to carry. But, as we can learn from great philosophers old and new, nothing could help them get through it better than this strong sense of purpose.
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An accomplished, results-driven sales and marketing professional, Gabriel has held sales and marketing leadership positions in Singapore and China at some of the world’s most successful and respected global technology enterprises.
During more than 20 years spent at IBM, Sun Microsystems and Microsoft, Gabriel developed and implemented sales and channel strategies to support strategic business objectives.
His specialism is growing and extending sales territories to grow revenues and increase market share.
Travis combines 15 years of software delivery, business modelling and leadership experience with a passion for transforming business needs into effective digital solutions. Before joining Wealth Dynamix in March 2018, Travis led Operations for Nikon – a role which incorporated CRM product ownership responsibility and initiated over 10 years of MS Dynamics experience, from 2011 to Dynamics 365.
Since joining the Wealth Dynamix team, Travis has been instrumental in designing and delivering some of our most strategic WDX1 projects. Leading the consulting team for WDX1, he is responsible for their recruitment and development. The team’s complex remit supports a fundamental aim – to ensure Wealth Dynamix delivers the best client experience. Travis is also responsible for ensuring the WDX1 product is designed and evolved in the most adaptable way possible to drive adoption across our client base, existing and future.
An experienced, tenacious marketer, Jo joined the Wealth Dynamix team in 2021 as Head of Marketing and quickly rose to the position of Chief Marketing Officer. A Brand and Marketing specialist with a proven track record in BRB and B2C communications, Jo combines a customer-centred approach with strategic thinking.
Having held senior Marketing positions in numerous FTSE 100 businesses, including Asda Stores Ltd, The Co-operative Retail Group, plus financial services brands MBNA, OneFamily, TransUnion, The Co-operative Group, she possesses a wealth of experience in the fields of finance and technology.
Jo is passionate about activating the Wealth Dynamix brand across every channel, taking a holistic marketing approach to drive consistency, salience and thought-leadership activity.
Agustin joined Wealth Dynamix over six years ago bringing a wealth of experience in change management.
Having experienced first-hand the challenges of managing clients through change, Agu now brings that expertise to Wealth Management firms looking to leverage technology in order to help them connect more effectively with their clients.
Agu has a deep technical knowledge of our solutions that allows him to deliver our products effectively, unlocking the full potential of every feature.
As our Head of Strategic Client Relationships, Agu’s specialist expertise supports firms to become more efficient, transparent and dependable using our CLM solutions.
Juan has over 20 years’ experience developing and implementing CRM solutions and has spent the last 10 focusing primarily on the Client Lifecycle Management (CLM) in the Wealth Management industry.
Currently Head of Development, Juan is responsible on overseeing the technical direction of the product.
Before joining Wealth Dynamix, Juan has worked for Barclays, Fujitsu and Ciber delivering large scale CRM projects in the financial services industry.
Juan has a first degree in Telecommunication Engineering from Universidad Blas Pascal and a MSc in Business Information Technology from London South Bank University.
An internationally experienced change management professional, Ben is responsible for overseeing projects both internally, and for clients.
In a career spanning more than 20 years in global banking, finance and management consulting, Ben has led strategy formulation, project planning, change management adoption, business networking consultation and transformational change projects at Fortis Investments, Barclays Wealth and Investment Management and Verisure Securitas Direct. Since beginning his career at Deloitte, Ben has also amassed a wealth of experience working on complex CRM system implementations, and is a PROSCI-certified Change Practitioner and a Certified Scrum Master (Scrum Alliance).
When David joined Wealth Dynamix in 2015 he brought with him a vast amount of experience delivering large-scale Microsoft Dynamics CRM projects. As a Senior Business Analyst at Royal Bank of Scotland David managed deployments with more than 2000 users, for both Business and Commercial Banking, as well as working on key AML initiatives for RBS International. In his current role at Wealth Dynamix David supports the growth and strategic direction of client implementations in Europe. Wealth Dynamix leverages David’s product expertise to shape the product roadmap and ensure that the firm delivers solutions with the right capabilities, that will be enthusiastically adopted, by all customers.
Prior to his involvement in the wealth management sector, David worked as a waste management contracts manager, working with Multi Services Kent to ensure effective waste clearance and re-use at the 2012 London Olympics.
Since joining Wealth Dynamix in 2019, Cédric has worked closely with clients to ensure that the WDX and CLMi solutions are deployed efficiently and effectively.
In a career spanning more than 25 years, Cédric has become an accomplished business and global project management leader covering both technology and financial markets sectors. Having held various roles in private banking (front, middle and back office) and brokerages, in both functional and technical roles, Cédric has led many projects including client onboarding implementations and KYC reviews, regulatory compliance projects (including PSD2, MIFID2/PRIIPS, GDPR, CRS, Rubik) and digital transformation projects (online and mobile design and implementation).
Cédric has vast experience building and managing international project teams, having created three offshore teams in Tunisia and India, managed a 70-employee company as Deputy CEO and a startup Fintech founded to create smartphone apps.
As Director of Pre-Sales, Johnny is responsible for maintaining the firm’s pre-sales policies, methodologies and resourcing. He is also leads some of WDX’s largest pre-sales analysis exercises, conducted for a wider variety of financial services firms spanning multiple jurisdictions.
Continual engagement with existing and prospective clients helps to inform the WDX1 product strategy, roadmap and pricing.
Johnny has spent his whole career in financial technology in various consultancy and
pre-sales roles. His expertise covers the full stack of systems required by leading Private Banks and Wealth Managers, encompassing core banking solutions, portfolio management solutions, Client Lifecycle Management (CLM) solutions and more.
William’s commercial expertise in connecting technology to solve wealth management business challenges was borne out of his early career as a stockbroker, followed by a variety of Client Relationship Management and Sales roles in asset management and banking.
Having experienced first-hand the challenges of doing the job, William recognises that an unwavering focus on client service is required to build progressive and mutually beneficial partnerships in FOR the longer term. Having gained further experience working for financial technology service providers including Calastone and Contemi, he has the specialist expertise needed to identify how to leverage technology to help wealth managers connect more effectively with their clients, and become more efficient, transparent and dependable.
In addition to his role as Commercial Director at Wealth Dynamix, responsible for new business development in the UK, US and Middle East, William sits on the board of the Securities Investment Management Association (SIMA) where he is actively involved in exploring industry trends and challenges.
An experienced and accomplished specialist in CRM technology and wealth management, Dominic is responsible for defining and leading the product roadmap for Client Lifecycle Management (CLM) solutions at Wealth Dynamix. Experienced in SaaS strategy definition, Dominic formulated the development and launch plan for the firm’s cloud-based CLMi solution.
Prior to joining Wealth Dynamix in 2014, Dominic held senior positions in both RBS and Barclays Wealth and Investment Management, where he was responsible for leading enterprise-scale CRM implementation projects.
With more than 15 years wealth management and WealthTech experience he has vast expertise and insights into best practice CRM and CLM execution.
François joined Wealth Dynamix in 2020 to grow the company’s presence in France and further extend business operations across Europe and has since been designated Chief Revenue Officer, a member of the board.
Having closed several flagship deals for the company across Europe and Switzerland, today his role encompasses responsibility for new and existing revenues, recruiting, structuring and managing the sales team, plus owning the business forecast and reseller channels.
Previously, François served as Chief Sales and Marketing Officer, Executive Committee member and investor at DreamQuark, an Artificial Intelligence software startup. At DreamQuark, he secured the firm’s first recurring revenues with Tier-1 banks and insurance companies, won the Fintech of the Year award and enabled A and B level fundraising. Before that François spent almost 10 years at Nokia Networks, leading European Sales for Analytics Software.
François has an MBA awarded by INSEAD and an engineering degree from the École Centrale de Nantes.
Currently Chief Operating Officer and Board Member at Wealth Dynamix, Natalie is responsible for the strategic direction of operations across the business. A wealth and investment management industry expert, with more than 25 years experience delivering large-scale technology projects, Natalie plays a pivotal role in ensuring the efficient running of the firm and meeting key business goals.
Prior to joining Wealth Dynamix in 2019, Natalie was Head of Technology at Bridgepoint Advisers, a UK-based private equity investment firm. She joined Bridgepoint following an 18-year tenure at Quilter Cheviot, where she was Head of Technology responsible for Operations and execution of the firm’s business plan.
A wealth and investment management industry expert, Brent has more than 25 years of experience in developing front to back software solutions that address sector-specific operational and compliance challenges.
Prior to co-founding Wealth Dynamix in 2012, he was a Director at Third Financial Software, where he drove product development.
Previously, he led business development and product strategy for the wealth management division of Financial Objects.
Brent spent 13 years at DST (now SS&C) until 2007, where he was Associate Director responsible for the global product strategy of institutional front office and wealth management solutions.
He graduated from Downing College, Cambridge, with an honours degree in Geography.
With a lifetime career in wealth management, beginning in front office sales more than 25 years ago, Gary is recognised as a highly successful, award-winning executive and serial entrepreneur.
Currently CEO at Wealth Dynamix, one of Europe’s fastest growing WealthTech firms which he founded in 2012, Gary has pioneered a new approach to Client Lifecycle Management (CLM) and built solutions suited to both enterprise-scale and mid-size financial institutions.
In his early career Gary excelled in a wide variety of FinTech sales management and executive roles in the UK, Switzerland and France.
Following his tenure as Managing Director at Financial Objects, which saw revenues grow by more than 300% on his watch, Gary founded and subsequently exited from Third Financial Software after it became a leading front office technology provider.