Nneka Orji, who leads Alvarez & Marsal’s UK Wealth Management Performance Improvement proposition, discusses with WealthBriefing consolidation within the industry, the gender and race wealth gap, and the lack of talent entering asset and wealth management.

In a recent interview with WealthBriefing, London-based Nneka Orji at Alvarez & Marsal's UK Wealth Management Performance Improvement proposition, highlighted the lack of talent entering the asset and wealth management industry.

“The sector is continuing to consolidate but at a slower rate, partly as a result of the macroeconomic environment” she told this news service in an exclusive interview. “One of the key drivers for this is attracting talent in the industry. Less than 8 per cent of advisors are under 30. An increasing number of advisors are exiting the industry, not just as a result of retirement, although a large chunk is due to this.” 

“Data shows that 70 to 75 per cent of advisors are looking to leave the industry in the next 10 years. This is partly down to the increasing pressure on financial advisors, as well as scrutiny around fees and the changing role and skills needed to be a financial advisor,” Orji continued.

“Expectations of a financial advisor are quite different today than they were 10 years ago, making them question if it’s the industry they want to be in. A lot of time is spent doing administration rather than providing the financial advice that they were trained to do,” she said. “Advisors are not necessarily getting the support they need. Some wealth managers are looking to invest in academy programmes, looking at different ways to recruit, train up and retain advisors,” she said. Faced with volatile markets and a challenging environment, client’s expectations are also increasing, she added.

“The wealth management industry has also been slower to adopt technology, with insufficient investment,” she said. Orji believes it will be critical to address these cost pressures, as the industry has to become more automated.

She thinks that human-driven advice from wealth managers is here to stay, but that artificial intelligence can play a much bigger role in the future, although not in the near term  Benefits of AI range from automating repetitive tasks, providing data-driven advice in specific areas such as portfolio optimisation, risk management and tax analysis. See here other articles on AI here and here, and a webinar on the topic here.

Orji also drew attention to the gender and race wealth gap, highlighting the need for more women to enter the industry. “Only 16 per cent of regulated financial advisors are women and also there is a gap in ethnic minority representation. Women are also more cautious about investing,” she said. “In the 18 to 35 age group, 24 per cent of men invest compared to 14 per cent of women. In the over 65 category, 47 per cent of men invest versus 28 per cent of women,” she added. “It’s not that they don’t want to invest. There is too much jargon used and the language needs to be more inclusive.” 

To help reverse this trend, Orji raises awareness of the opportunities that exist in the industry, for instance, by engaging with schools and also helping managers to increase their business and modernise. Orji, who has been consulting for over a decade, also spent three years as chief operating officer at Morrinson Wealth Management, part of St James’s Place.