Three months into a global pandemic that rocked the economy and sent employees into uncharted work from home (WFH) territory. Up to this point, most wealth management firms had no experience with entire teams working from home for any length of time. Now, having proved that a total workforce WFH solution is viable, the challenge facing these firms is where do we go from here?
This is a question being asked across the business world. For wealth management specifically, F2 Strategy asked 55 C-level IT executives, from wealth management firms representing $5 Trillion in assets, to complete a survey focused on business recovery planning after COVID-19. Reflecting on the effectiveness of the response of their businesses to the crisis, most of the executives gave their firms’ high grades, with the majority rating them at 80% or higher. However, looking forward, the executives recognized that there are still a lot of questions to answer as they enter the “workplace partial reactivation” phase. Below are the six big trends revealed at this beginning stage of reactivation.
Trend One: Work from Home Makes Case for Revised “Life/Work” Balance
We’ve reached the tipping point: work from home has worked. Now firms are debating if it is more productive to continue working from home than to return to the office to wear masks and gloves while social distancing. The majority—75%—of respondents said they will allow or request some employees to permanently work from home.
This is a fundamental shift from a work/life balance that puts work first, to a life/work balance that puts employees' life first. Firms that don’t allow work from home could see human capital attrition and struggle to attract new talent.
It’s yet to be seen how firms will enable the business to function effectively as we shift from a work/life balance to a life/work balance where the home office is as important as the head office. One thing, however, is clear in this new reality, firms must address employee support in new ways focusing on things like IT security and internet speeds at home.
Trend Two: Firms’ Increased Interest in Digital at Odds with Planned Reductions in Funding
The switch to “total digital” as a method of conducting business is driving a renewed examination of costs and efficiencies in the operating models of wealth managers. Right now, it’s unclear where the funding will come from to support the increased digital engagement. However, there are pockets of expenditure in the existing business that may begin to emerge that were previously never considered an option. For example, the amount of office space required going forward could be substantially less and also utilized differently thereby removing (over time) a significant regular cost to the business which could and should be reallocated to digital solutions. But this will require a shift in leadership mindset to make the tough calls.
Trend Three: Offices of the Future Face Satisfying Much Wider Stakeholder Base
Boardrooms are changing. Firms seek new voices, including employees’ in some cases, to guide their return to the office. They also seek input from outside resources such as local and state governments, health experts and the CDC as well. It’s unclear to most firms who will enforce the new rules of social distancing once they are in place. But, for perhaps the first time, company boards are putting their employees’ needs and feelings at the top of the list as they consider changes to facilities and policies.
Trend Four: Executive Leaders are First in Line to Return to Office
One thing that the survey made clear is that the leaders will lead the return to the office. There is little difference between firms greater than and less than 10 Billion AUM - both will send executive leadership back first. This demonstrates how quickly leaders have become comfortable with their employees working from home. No longer will achievement be measured by who is at their desk first in the morning, or longest during the day but rather how productive and effective they are in their roles.
Trend Five: CTO Becoming the Kingmaker of the New Business Model
In the new business model, CTOs will be responsible for mitigating their firms’ biggest concerns. Currently, their focus is on ensuring technology capabilities best address Client Servicing, Employee Engagement and Operational Efficiencies. The CTO’s decision-making process time has been radically shortened. CTOs are getting the capabilities they request quickly, whereas in the past, they used to have to wait their turn.
It is still to be seen what mental effect on work from home and/or back to office with social distancing in place will have on employees. In either case, CTOs must consider how digital strategies will both support and negatively affect employees’ emotional well-being. This new reality means CTOs rise to the forefront of the employee well-being debate (the domain of the CHRO, Sales leads and CEO) to determine what technology can do to make the business better.
Trend Six: East West Split onDesire to Go Back to the Office
The east-west divide illustrates that there will be no uniform industry approach. Firms are dealing with "back to office" rules that vary from state to state. The industry is working to understand what factors are driving this sentiment and if digital capabilities play a role. Once that becomes clearer, firms must consider what it means from an operations perspective.
The rapidly changing landscape will require ingenuity and leadership from the industry’s CTOs. Technology will be a critical factor for a firm’s success in moving from workplace partial activation to having a new workplace formula in place. It will also play a crucial role as firms address the continued uncertainty over the next 12-24 months.
Want more on this topic? We’ve created an infographic highlighting the survey’s top trends. Download it here.