{"id":36465,"date":"2019-10-09T08:00:24","date_gmt":"2019-10-09T15:00:24","guid":{"rendered":""},"modified":"2023-05-31T16:27:40","modified_gmt":"2023-05-31T23:27:40","slug":"trends-in-private-wealth-management","status":"publish","type":"post","link":"https:\/\/cm-edgetun.pages.dev\/en-us\/industry\/blog\/financial-services\/2019\/10\/09\/trends-in-private-wealth-management\/","title":{"rendered":"Trends in private wealth management"},"content":{"rendered":"

\"Man<\/h2>\n

It\u2019s fascinating to think about Microsoft\u2019s role in driving technological innovation in private wealth management, one of the core areas of focus for the Capital Markets business in FY20.<\/p>\n

In late August, I attended Market Group\u2019s Annual Private Wealth Florida Forum where I moderated a panel discussion on asset allocation, discussing how wealth managers balance risk and opportunity in their asset allocation strategies. Below are a few highlights from the panel discussion.<\/p>\n

Interest rates<\/h2>\n

We began with a discussion of how current interest rates are impacting asset allocation. One of the panelists highlighted that low-interest rates are driving an over-allocation to equities while an increase in interest rates could create a \u201creverse tidal wave.\u201d\u00a0 His expectation was that rising rates would lead investors to head for the exits in credit markets leading to a potential collapse in bond prices.\u00a0 However, when we returned to the topic later on, there was no consensus among the panelists. In my opinion, US interest rates will remain low and in fact, may even turn negative.<\/p>\n

The rise of passive management<\/h2>\n

The secular shift from actively managed assets to passively managed vehicles has been striking, but not surprising. Academic research has shown that active management does not produce superior results to passive management. Rather, the time it has taken for the shift is surprising. I believe that some of this is technological innovation \u2013 not of the digital kind, necessarily \u2013 but mostly product innovation, involving the creation of ETFs and funds that are easy to trade and lower the barrier to entry.<\/p>\n

Customer-specific asset allocation<\/h2>\n

An area often overlooked by allocators is allocation within specific customer relationships. Wealth managers are faced with important questions: In a family with three generations, how should the family optimize the allocation of an investment in a high growth fund that may generate large tax liabilities?\u00a0 How should the allocator optimize the use of intrafamily loans to minimize these liabilities?<\/p>\n

The bottom line<\/h2>\n

Microsoft has robust capabilities to address the challenges discussed above:<\/p>\n