Trends! Trends! Trends!

Chip Kispert


After the first couple of weeks of 2021, I was ready to return the year to its sender. Yet, as I sit here writing this, it’s 5:15 pm, and the sun is just setting behind Lookout Mountain here in Denver. The days are getting longer, which is a trend. One that I like.

So, if you have not figured it out, trends are the theme of our January 2021 Beacon Flash. Our Beacon team members have shared the trends that they see coming hard and fast in 2021. Indeed, this compilation of ideas makes for a broad array of thinking, especially related to forecasting what’s to come. We hope that our ideas challenge you to think a little out of your comfort zone. Enjoy the read. We will revisit these when we do our December 2021 Year in Review Edition and see how we did.

Also, in this Newsletter, we have two of my industry friends who will share what they see ahead in 2021. Ishan Girdhar, CEO of Privva, and Sid Yenamandra, CEO of Entrada, a subsidiary of Smarsh, Inc., will share their thoughts of what they see coming in 2021. Keep in mind, wink, wink; their perspective may be problem-specific.

Also click here to see my first Flash TV with my friend Michael Pinsker, President of Docupace. We conducted this interview during the holidays. We explored his thinking on industry trends, and where he sees Docupace going.

Finally, we always like to supply a little teaser as we look at our next Newsletter. The team has decided the next theme will explore the changing face of marketing as we look forward to a post-pandemic world. And, we will also have a significant Beacon announcement to coincide. ♦

Talk soon!

Chip's Signature


Musing from the Beacon Team

Ron Fiske


Annus Horribilis

While the phrase “Annus Horribilis” has been around for quite some time, it was made more famous by Queen Elizabeth II, when she described the year 1991. For her, it was quite a year, with Windsor Castle burning down, Prince Charles and Diana separating, Prince Andrew and Sarah Ferguson divorcing, among other issues. Our “Horrible Year” was one that the world will soon not forget, with a once in a century pandemic ravaging the globe, bringing with it all sorts of dislocation and misery.

As we look ahead to 2021, we are more than glad to turn the page on 2020 while we are cautiously eyeing what 2021 may bring us. Here are some ideas that I have about potential outcomes within the Wealth Management industry for 2021:

  1. The M&A Trend

The M&A trend that was observed within Wealth Management will continue to accelerate. This will be driven by any number of factors, including a lot of Private Equity and other investment vehicles within our space, including some recently launched SPACs. Other factors include the desire to develop liquidity for equity embedded within Wealth Management practices and a desire for greater profitability as costs like operational and compliance expenses can be allocated over a greater number of advisors.

  1. FinTech Adoption

FinTech adoption will also greatly increase as advisors continue to see the benefit of greater automation. Whether it is e-signature, model portfolio construction, rebalancing software or any other of the myriad of FinTech capabilities, advisors will work to scale their practices and make them more efficient and able to deal with both clients and their offices remotely. This will force a greater migration to cloud based processing and the continued use of digital communication tools like Zoom and Microsoft Teams.

  1. The Introspection

The introspection caused by 2020 will lead to a wave of both advisor and end-client retirements. Many people have seen family members suffer and die from this ongoing pandemic and, as a result, may have a different perspective about work and their lives.

Jerry Wackerhagen


Trends in Vendor Risk Management 2021

Recently we hosted a virtual roundtable with over 40 industry executives Here is what we heard from the group related to trends in managing vendor risks moving into 2021.

  1. Vendor Complexity

Firms today deal with thousands of vendors who themselves have contractors, partners, and suppliers. Risks can come from anywhere along this supply chain and most vendors do not or cannot guarantee the mitigation of these risks. 2021 will demand automation to perform due diligence and ongoing assessments.

  1. Old Methods Do Now Work

The traditional approaches toward Vendor Risk Assessments are not working such as spreadsheets and paper documents. Automated tools are needed as table stakes for a comprehensive Vendor Risk Management Program. Some firms are using decentralized vendor monitoring systems which are time-intensive and cannot build to scale. Centralizing monitoring of vendors will be critical in 2021.

  1. Regulatory Pressure

RegBI and the heightened scrutiny that comes with new regulations cause firms to be under increasing pressure from regulators to secure client data. Most firms report they suffer from a lack of policy awareness, adequate training, and staffing for their teams. Regulators are demanding more automated processes and ongoing repeatable assessment of vendors.

Overall, we hear from clients that vendor risks are becoming more complex and increasing in nature. Consolidating vendors into a critical few is a goal most firms have but have not implemented. Firms are looking for help in developing a robust program to manage vendors.

Alan Giancaterino


Five Sales & Marketing Trends for 2021

  1. MarTech Rules

Marketing Automation technology continues its march towards widespread acceptance and usage in 2021. More and more firms have jumped on the MarTech wagon. The majority of CMOs are anticipating an increased marketing spend in 2021 and automation plays a pivotal role in their plans.

Tools like HubSpot, Marketo, Zoho, and others will become commonplace components of the tech stack at most firms. Even small firms will get in on the action due to MarTech’s ability to create instant scalability.

  1. Sales & Marketing Diversity

Diversity initiatives will help reshape the make-up of today’s Sales & Marketing teams. It is important for firms to mirror the clients they serve by displaying a commitment to hiring and developing key team members that bring a new level of diversity.

ESG isn’t just about investing. ESG represents a mindset focused on the Environment, Society, and Governance. Firms will need to incorporate ESG principles into their Sales & Marketing to display their commitment to clients and potential clients.

  1. Tightening Regulatory Environment

All signs point to a further tightening of the regulatory environment in 2021. Wealth Management firms will have little margin for error; hence they will rely more heavily on RFIs and RFPs moving forward. Solution providers should be prepared to handle an increasing number of RFIs and RFPs as a routine part of their 2021 sales efforts. Failure to prepare will only further elongate the sales cycle.

Using technology to respond to these important requests expeditiously and accurately will become more commonplace. Consider participating in an industry repository where your RFI and RFP responses can be streamlined for future use.

  1. Reign of the CFO

The Pandemic has strained the finances of many firms and placed an increased emphasis on fiscal responsibility in 2021. CFOs will take the reins at many firms or at a minimum become a more critical voice on new expenditures affecting the firm’s bottom-line.

Many firms will divest purchasing authority from individuals and move to a ‘decision by committee’ model for major purchases. This too will elongate sales cycles and make navigating the path to a favorable purchasing decision more complex for solution providers.

  1. Competition Rises

Prepare to see more competition from new players in our space. Additionally, expect more ‘product creep’ and resulting overlap as existing solution providers expand their offerings in search of new revenue streams.

Subject matter expertise will be an important differentiator for Sales & Marketing teams. Marketers will need to be precise in their communications and demonstrate an intimate knowledge of their audience. Sales Reps will need to immerse themselves in detailed product specifications with an eye on compliance and solving problems for clients. ♦

Marshal Levin


The Three Trends Every Firm Needs to Understand in 2021

The business landscape for both wealth management and wealth technology players will be re-shaped in 2021. A confluence of factors ranging from the maturation of technologies to the shift in the capitalization and ownership of wealth management and wealth tech firms have been catalyzed by changes wrought by the Covid-19 pandemic. The three trends that I believe are most significant:

  1. The maturation of portfolio mass customization

Technologies that support indexing and fractional share purchasing combined with the emergence of the straight through portfolio creation experience (full integration of financial planning, proposal and portfolio management platforms) create the ability to profitably manufacture and manage highly personalized investment portfolios for the mass affluent market. This is also the first solution domain where enough data may be become available to successfully introduce AI solutions which go beyond RPA (Robotic Process Automation) to fully exploit natural language processing and machine learning.

  1. The displacement of the custody & clearing desktop by differentiated technology portals/ecosystems

The existing evolution of the advisor/customer portal is being accelerated by the need to address customers through deepening screen-to-screen engagement, which offer a simple but elegant user experience and support greater engagement with solutions like the straight through portfolio experience. Bound together by workflow, process and deep data integrations, strategic partnerships amongst complementary solution providers will create a wirehouse like technology platform with the assurance that the advisor still owns the customer relationship.

  1. Strong brand creation by Independent B-Ds and RIA’s

The independent model has always had as its foundation freedom of advisor choice in product, technology and business model. Risk, regulatory and economic forces have and will continue to narrow these choices. This winnowing of choice is really an opportunity to create real brand differentiation by the coalescence around differentiated technology ecosystems combined with the creation of multiple business model platforms that support a wider choice of compensation/revenue sharing / ownership schemes for advisors. The continued growth in table stakes for firms and the growing industry investment by pure financial players, led by private equity, will make 2021 the year that distinct branding becomes a major trend providing greater “stickiness” for advisor relationships and establishing more tangible brand equity. ♦

Chip Kispert


Omne Trium Perfectum

Out of a year of incredible adaptation along with enduring lots of hardship, human ingenuity is bringing forth some incredible pearls. In other words, there is light at the end of the tunnel. The following trends are my “omne trium perfectum” for 2021. My “3” are driven by the changes the pandemic has forced on all of us, and ultimately all have their tells in human behavior changes.

  1. The further expansion of the omni-channel digital experience which weaves together the investor, the advisor, and the home office. The demands of going remote has put the spotlight on connecting the digital dots using technology driven automation, to support all aspects of the client experience. From customer recruitment, to investor communication, to customer risk oversight, manual options are not good enough anymore. Furthermore, the ease of access to investing information for non-vanilla vehicles is adding pressure for enterprise wealth firms to expand their product shelves beyond traditional vanilla, and support them with labor saving, robotic technologies that support self-regulating digital workflows. For enterprise wealth firms, the digital experience offered is going to be a yardstick for customers.

  2. Prospect/Investor communication will never be the same after this pandemic. Zoom meetings are now the norm. No need to meet at the advisors office. However, the communications game has been ratcheted up. The old days of sporadic and unimaginative content communications are gone. Wealth firms need to up the game with AI tailored content that is relevant to a customer. The balance of investor customers have the expectation that their advisor will educate them – daily or weekly, not quarterly, with content specific to their interest and needs. Add on, the shrinking attention span of the customer is calling on advisors to up their communication game through the use of video drops and social media. Advisors are now “influencers.”

  3. Many enterprise wealth firms are under serious pressure. 1099 firms, especially, are wrestling with low interest rates, slim payouts and margins, higher labor costs, increased technology and regulatory demands, along with the reality the pandemic is emasculating many of those in the pool of investor prospects. So, in the midst of challenging business prospects, firms are presented with two options – sell out or embrace technology. We will continue to see consolidation in 2021. Yet, we will also see wealth firms go all in with technology, embracing RPA and AI to support both the foundational and the shiny. While most see AI through the Tesla lens, the reality is that AI and RPA are tools that can gather, move, and validate data. Firms eyeing automating their data management are actually going to be able to support the proverbial self-parking AI shiny objects. And, oh yes, one other thing – it’s a lot cheaper in the long run!

A year ago we were looking at 2020 with naïve eyes, much like we are looking at 2021 now. 2020 was coming off of 2019, which looked like 2018, and 2017. While we always see change as a constant here at Beacon, 2020 was an absurd year. Yet, 2021 has a foundation of unique reflection, behavioral transformation, and technology advancement which will help us work smarter, and focus on more of our lives than work, which we have come to appreciate more in 2020. ♦

Industry Leaders’ Perspectives
​Salesforce Overlays

Ishan Girdhar


Three Trends in Risk We See in the Enterprise Wealth Management Space

The Enterprise Wealth Management industry is faced with an unprecedented challenge of balancing growth, driven by a record stock market and growing number of individual accounts, and increasing levels of regulatory compliance and oversight from a cybersecurity and privacy perspective.

Three trends in risk we see in the enterprise wealth management space:

  1. Board and management mindset shifted from “Are we compliant?” to “How are we compliant and what are we doing to stay compliant?” There are more eyes and ears on risk and compliance than ever before especially as we have shifted work to a work-from-home environment. As a result, the management team and Boards must be educated as they are now accountable for the organizations compliance. Ignorance is not an acceptable response anymore.

  2. Vendor management went from nice to have to need to have. Driven by the increased reliance on technology to operate businesses, confidential and sensitive data is flowing to third party vendors hosted in the cloud increasing the need for third-party due diligence. As such, a formalized, structured vendor management program is critical to the protection of client and employee data and privacy.

  3. Solar Winds is making sure firms have a full inventory of suppliers and updated contact information. Firms are ensuring a comprehensive list of suppliers and partners that service wealth management firms and appropriate contact information is up-to-date. Many firms were scrambling to identify all suppliers, not just IT related suppliers, to identify the impact of the SolarWinds breach on their external environments. I have never met Security, Risk, or Compliance teams that have extra time on their hands so finding trusted partners and technology to help is really important. We hate to be the bearer of bad news, but this is only getting worse. Don’t hate the messenger. Having said that, Privva and Beacon have designed a methodology and standard to put hours back in your day. ♦

For more information, Visit Privva

Alon Alroy Bizzabo


Cybersecurity Trends 2021

Cybersecurity is front and center for most organizations in 2021 given the WFH dynamic and the recent SolarWinds breach from nation state actors.

At Entreda, we see three important cybersecurity trends for 2021 in the wealth management industry:

  1. Personalized, Security Awareness Training – There is a 65% increase in ransomware attacks against users in 2020 and therefore we see firms investing in more anti-ransomware solutions, end-point hygiene solutions and more context-aware and personalized security awareness training products for their employees, clients and contractors.

  2. Updated Incident Response playbooks – Given that a significant percentage of the workforce is probably working from home (more so than before), we see that most organizations are having to revise their incident response plans to accommodate the work from home scenario. Additionally, organizations are investing in more table top incident response exercises to ensure disaster preparedness in case of a massive cyber attack and resulting data breach scenario.

  3. Enhanced Data Privacy risk assessments – PII is everywhere and given the work from home paradigm, the data footprint has expanded even more which creates additional risk. Organizations are doing more data discovery and privacy exposure audits to identify where the PII data might be housed and increasing investments in data security for those specific areas or users. ♦

For more information, Visit Entreda