A study of the global wealth management sector underlines why the industry is scrambling to keep pace with fintech.

Almost half (48 per cent) of 2,000 investors recently polled said they might sack their wealth managers if they cannot get access to new digital and advisory solutions, suggesting the fintech revolution creates a threat to slow-moving incumbents.

The findings come from a report from Roubini ThoughtLab, based on a poll of investors and 50 investment providers in 10 wealth manager markets around the world. The study was produced with sponsors including Bank of Montreal, Broadridge Financial Solutions, CFA Institute, Cisco, eToro, Schroders, SEI, and State Street.

Among its predictions, the report said household assets will rise by $89 trillion in 25 top markets by 2021, to $296 trillion, with largest gains coming from emerging markets such as China, Mexico, and Poland. It said that more than $50 trillion in investment will flow into the wealth industry from the rise in household assets in these markets alone, increasing the pool of investors.

Such findings, while not necessarily startling, highlight why fintech, and the various innovations associated with that term, ranging from Blockchain to machine learning, is a dominant theme for today’s banking and wealth industry. Since the financial crisis of 2008, the process has accelerated as firms seek to win new clients and retain existing business in the face of soaring regulatory costs and a lack of trust in traditional business models.

The report said that changing demographics and increased use of digital technology will transform what clients expect of business in the future, and wealth managers will struggle to keep up with the pace. Investors will expect more from wealth providers, including more customised solutions to their demands, access to wider investment options, greater cybersecurity, and the use of the latest technology, the report said.

A pinch point for the industry is that some wealth managers aren’t moving fast enough to meet investors’ requests, creating a gap between promises and hard outcomes. Some 63 per cent of investors surveyed said their providers are prepared to ensure cybersecurity, versus 48 per cent of providers who say they are.  Similarly, 64 per cent of investors think their investment providers can offer options across asset classes and global markets, but 47 per cent of firms say they are prepared to do so.

The drive for more digital offerings is not just coming from the younger generation, either, but across all population cohorts, the survey found. Some 41 per cent of millennials expect to use anytime, any device access over the next five years, but 50 per cent of baby boomers expect to do the same..

Unlike other industries, such as retail, which experienced external disruption from digital start-ups such as Amazon and eBay, fintech solutions will become widely adopted by incumbents with trusted brands, the report said. “The winners in this new playing field will likely be large full-service institutions, mutual funds companies, and trusted names in wealth management,” Lou Celi, CEO of Roubini ThoughtLab and the programme director, said. “These organisations may be better equipped to meet the rising demand for specialised expertise, responsive 24x7 service, and wider investment and financial services,” Celi said.

A top priority of 59 per cent of investment providers is to build, partner or acquire fintech capabilities. This product strategy will resonate with investors: 37 per cent said they would only work with a fintech associated with a trusted brand, and 45 per cent said that fintech solutions can be very valuable when used with traditional investment services, it said.

The research indicates that wealth companies will transform their businesses to take full measure of the digital revolution by 2021. Digital leaders - firms in advanced stages of digital transformation -report that last year they increased assets under management by 7.2 per cent, profitability 6.8 per cent and productivity by 9.4 per cent through the use of technology.