Wealth management is an essential practice that helps people from all walks of life better handle their resources. Like any industry, however, wealth management is changing. From employee makeup to client preferences and technology changes, wealth management is poised to transform in the coming decade.
It’s something that Justin Nelson, the managing director and head of the asset management and financial principals coverage team for J.P. Morgan Private Bank in Connecticut, knows well. “We do a lot at work with clients on private equity, venture capital, real estate, hedge funds,” he says. As a senior private banker, he also directly manages relationships with families in New York and Connecticut, giving him a firsthand look into all sides of clients’ finances, from investing to banking.
Nelson leads a 20-person team that oversees over $15 billion in client assets. As the team leader, it’s his job not only to get results for his clients, but also to keep an eye on the changing landscape of wealth management. His persistence has paid off: Barron’s named Nelson as its second-ranked adviser in Connecticut, and he made the Financial Times’ 400 list in 2020.
Nelson shares several emerging wealth management trends that have the potential to change the future of this industry forever.
Clients Need Help With Strategic Donations
According to a 2023 report by Bank of America, affluent individuals contribute the most to charitable giving. Philanthropic donations are a savvy strategy for reducing tax liability, but Justin Nelson’s clients see giving back as more than that. In fact, Bank of America’s survey found that 69.9% of donors choose causes based on their personal values or beliefs.
In short, affluent clients want to use their wealth to make the world a better place. For Justin Nelson, the influx of interest in giving back is a welcome part of his day-to-day responsibilities. “There are a lot of people that I work with who want to give to charity but can’t figure out exactly what it is they want to do,” he says.
Nelson researches charities that align with his clients’ wishes so their funds are put to the best use. With more wealthy donors jumping on this trend, America’s nonprofits (and the people they serve) stand to benefit most from this generosity.
A Pivot Toward Technology
With institutions like J.P. Morgan employing tens of thousands of technology professionals, the financial industry is evolving into a tech-driven sector. This shift demands a new breed of financial professionals who can seamlessly navigate both finance and technology.
The challenge is that the workforce isn’t quite there to support these needs. “I think that there’s always going to be a shortage of coders,” Justin Nelson explains. “Even where I work, I think we have 40,000 technology people. It’s more like a technology company than a bank.” The shortage of technology pros could cause innovation bottlenecks, so it’s no surprise that more colleges are rolling out fintech-specific majors.
Changing Workforce Demands
The emergence of private equity funds is also affecting the flow of talent that institutional lenders, like banks, can attract. “My perception is that a lot of the private capital, private equity firms from a talent perspective, they’re hiring a lot of the people that we would hire, and private equity, from a talent perspective, I’m sure they want our people and vice versa,” Justin Nelson says.
“I think that what was so attractive for startups and things like that was that people thought they could get to where they want to get to in a year or two.”
This competition isn’t new, but the sheer scale of growth in private equity gives Nelson pause. To remain competitive, banks will need to think outside the box to avoid feeding into the private equity boom. Bankers like Justin Nelson can still offer a more bespoke, all-in-one experience that private equity often can’t provide, which is an advantage for wealth management clients who crave simplicity.
Wealth management will continue to evolve as client demands and technology change. In Justin Nelson’s opinion, charitable giving, technology, and the shifting face of the workforce will have a tremendous impact on wealth management practices going forward. Instead of avoiding change, Nelson encourages the industry to embrace trends wholeheartedly to stay competitive and client-focused, no matter what the future holds.
