Q&A: A wealth management operating model transformation journey

Forward-looking wealth management firms know digital and operational transformation is no longer a question of ‘if’ but of ‘when’ and ‘how’. Michael Allen, chief operating officer at Waverton Investment Management, explains how his organisation has embraced change

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In December 2021, Waverton Investment Management embarked on its operational transformation in partnership with leading provider of wealth management technology and operations, SEI, to help fulfil its strategic objectives and support growth. Waverton’s chief operating officer, Michael Allen discusses the challenges and opportunities of undergoing a major operating model transformation in today’s fast-changing world.

What motivated you to embark on this transformation journey?

The wealth management industry has significantly shifted in recent years. Investors’ expectations of the industry are changing. Waverton has a multi-year growth plan and required an operating model that would deliver a robust, resilient and scalable platform to achieve its goals. For firms to remain competitive in this environment, change and innovation are key.

I joined Waverton in 2019, closely followed by chief executive Nick Tucker in February 2020 and we were aligned in our vision to scale the business, creating new growth opportunities. Waverton has a strong reputation for award-winning investment performance and client service and we needed to ensure that we had the right operating model and infrastructure to build upon. We were aware that the technology used by our investment and client-facing teams had evolved at a different pace to our legacy operational infrastructure.

The issue with legacy systems, and this is by no means unique to Waverton, is that they are often ‘hard wired’ and they don’t allow for agility or automation. Many legacy systems were also originally brought in that acted independently of each other. These inefficiencies can pose compliance risks, impact client satisfaction and hinder firms from effectively servicing the next generation of clients.

What led you to consider outsourcing and a partnership with SEI?

Once we had identified our objectives, the next step was to think very carefully about how we could best address these goals. We knew we needed to do something different, but this required board approval and senior management engagement. Two of the biggest roadblocks to effective transformation can be culture and resistance to change. We were a team of around 150 people and big operational changes require a lot of consideration, in terms of people, disruption and cost. The most important question was – how do we ensure we get the right outcome for all our stakeholders? Mistakes can be expensive and frustrating, and projects can often end up putting significant strain on management time and detracting attention away from growing the business – the very opposite of what you want to achieve.

The challenge is that there is no one-size-fits-all solution; you need to really think about what would suit the nuances of your particular organisation and business model. For us, adopting the SEI Wealth Platform within Waverton meant that we could streamline the core part of the business infrastructure, enabling us to focus on our clients. The platform also provides embedded workflows, increased automation and centralised operational data which reduces risk and boosts our operational resilience. For us to achieve these strategic goals, we knew we needed to leverage the expertise and experience of a partner who could also scale to support our growth over the long term.

How can wealth managers use data to drive business efficiency?

We are seeing growing interest in areas such as artificial intelligence and machine learning, but for those technologies to work to their full effect, good data is critical. The volume of data available to wealth managers is huge and ever-growing but knowing how to best maximise your data and glean insights to drive business growth is an ongoing challenge. How do you ensure that the right people have access to the right data? And importantly, how do you use that data intelligently?

We have integrated with SEI Data Cloud, which has enabled us to significantly improve the way we capture, organise, store and analyse data to enhance our business and client services. It is important to Waverton to have a sophisticated technology team. SEI Data Cloud, and the expertise that comes with it, has enabled us to leverage our data warehouse to its maximum potential.

We wanted to work with an experienced provider who understood the wealth management sector and had a proven track record of supporting organisations

Having gone through the process, what are the key attributes that wealth management firms need in a strategic partnership for it to succeed?

It is critical that you undertake thorough due diligence when selecting a partner to work with. Business process outsourcing is not just about new tech; it is about finding a long-term partner who understands your business and will work alongside you to help you meet your specific goals.

We wanted to work with an experienced provider who understood the wealth management sector and had a proven track record of supporting organisations. SEI stood out to us for many reasons. They understood us as a business as well as the wider wealth management market and, importantly, they were a great cultural fit. This cultural alignment was particularly important to us as part of our decision to appoint SEI was the movement of a number of our operational staff. It was key that we were able to find a firm where we knew those staff would be valued.

When working so closely together, particularly on large-scale projects that come with inherent risk, there are bound to be ups and downs and differences of opinion. The key is how you respond to those differences; there needs to be a level of trust that you can be completely honest with each other and listen to what the other is saying. Since going live in May, we have worked hard to build and maintain a respected relationship, which means we tackle challenges together in a sensible, pragmatic way.

Since partnering with SEI, Waverton’s assets under management have continued to grow. In November, Waverton expanded its range of successful multi-asset funds.

I firmly believe that with our transformation underway and the active support of SEI, Waverton can look forward to achieving its strategic growth plans.

To find out more, visit seic.com/seiwealthplatformuk