MSCI: Personalisation shifts from perk to priority in wealth management
Personalisation in wealth management is shifting from a differentiator to a necessity, driven by client demand and technological advancements, according to MSCI’s latest report, ‘Emerging Trends in Wealth Management’.
The research, based on a survey of 220 wealth industry professionals, including investment teams, portfolio managers and financial advisers, highlights the growing need for customised investment strategies. Notably, about a quarter of the respondents were based in Asia Pacific (Apac).
Historically, personalised wealth management was a niche offering reserved for ultra high net worth (UHNW) clients. However, the democratisation of wealth management, combined with cost-efficient technologies, has made customisation more accessible across client segments.
The survey found 60% of respondents expect the majority of HNW client portfolios to require some level of customisation, either now or in the near future. The primary driver of this trend is personal investment preferences, cited by 73% of respondents. Tax considerations, including the avoidance of taxable gains or losses, were also key factors.
“The demand for personalised portfolios is growing across all client segments, from HNW individuals to emerging affluent investors,” said Alex Kokolis, global head of wealth at MSCI. “Clients now expect personalisation in all aspects of their lives, including financial services. They want portfolios tailored to their unique goals, values and preferences.”
Challenges in customisation
Wealth managers have traditionally relied on model portfolios to efficiently offer investment strategies at scale. However, as demand for customisation increases, maintaining and modifying model portfolios has become more complex.
According to the survey, 55% of respondents reported a rising demand for model modifications, while 58% said it was easier to build a new custom model rather than adjust an existing one. This growing need for customisation has created operational frictions, limiting the scalability of model-based portfolio management.
Transparency in private assets
As personalisation gains traction, clients are seeking greater transparency into how their investments align with their values. This is particularly relevant in private markets, where 82% of wealth managers expect to increase allocations over the next three years. Interest is especially strong in Apac, where 92% of respondents anticipate higher allocations to private assets.
However, barriers remain. Nearly half (45%) of all respondents cited a limited understanding of private assets as a major obstacle to increasing allocations. In Apac, ineffective sales enablement (50%) and inconsistent measurement (44%) were additional challenges. Other concerns included illiquidity (52%) and lack of transparency (46%).
Advisers (21%) and portfolio managers (40%) viewed their current private market solutions as insufficient, compared with 59% of investment teams, highlighting a gap in capabilities.
Technology: key to scaling personalisation?
Technology is seen as a critical enabler of both transparency and personalisation. Yet, MSCI’s survey suggests existing solutions often fall short. When asked about their biggest tech challenges, 45% of respondents cited reliance on manual portfolio monitoring. Another 42% pointed to a lack of dynamic insights on taxes, risk and other investment factors.
Additionally, 39% of wealth managers expressed interest in a single platform to manage all assets across portfolios, while an equal percentage sought better-designed client portals to enhance engagement.
“Digital platforms can help wealth managers meet these needs by aggregating and presenting complex data in meaningful ways,” said Dhruv Sharma, executive director at MSCI Research. “From geographic and thematic exposure analysis to detailed insights into private assets like private credit and private equity, technology can bridge the gap between demand and execution.”