Remote Work Is Here to Stay. Are Wealth Management Firms Ready?
When COVID-19 hit the U.S., many companies were forced to rapidly shift to remote work, causing immense frustration. But after going through the first four stages of grief (denial, anger, bargaining, depression), it seems that as a society we’re finally on the fifth and final stage: acceptance.
As the country reopens, many firms are realizing that having a fully remote workforce isn’t so bad. In fact, many financial firms are actually changing policies to allow permanent remote work.
In the midst of the coronavirus crisis, with 90% of his workforce working from home, Morgan Stanley CEO James Gorman told Investment News that the firm had “proven we can operate with no footprint.” And although Gorman supports team-building and fostering creativity in-office, he says it’s likely that their 15,000 financial advisors and support staff will continue spending time working remotely.
“Now, do I think that everybody’s going to be working from home? No,” Gorman said. “But could I see a future where, part of every week, certainly part of every month, for a lot of our employees to be at home? Absolutely.”
His sentiment reflects the overall trend: Even after it’s safe to return to the office, companies are going to allow remote work. In fact, according to an April 2020 survey from Aite Group, leaders at financial institutions predict that 22% of their jobs probably won’t come back to the office at all post-reopening.
But is the industry ready for the shift?
Let’s take a look at the benefits of (and obstacles to) remote work for wealth management firms.
What are the advantages of remote work for wealth management firms?
There are many advantages of remote work for wealth management firms, including the ability to have a smaller office with less expensive overhead, as well as the option to expand hiring to new markets to make it easier for top-level talent to join their firm.
Additionally, research from Harvard Business Review suggests that remote work can actually increase productivity and job satisfaction.
The flexibility of working from home is also appealing to prospective employees: Research from Princeton University, Harvard University and the National Bureau of Economic Research shows that remote work can be used as a perk to attract workers and reduce hiring costs.
What are the hurdles to remote work for wealth management firms?
Although the current consensus indicates that working from home is here to stay, smaller independent broker-dealers and RIAs may lag behind larger firms when it comes to implementation.
That’s because remote work depends on digitization; if processing and accessing paper documents are still a large part of your job, then remote work becomes practically impossible.
COVID-19 has spurred some firms to hasten their adoption of digital tools powered by robotic process automation in order to ensure key processes such as new account opening run smoothly without workers in the office.
Thankfully, the technology that makes this possible is readily available. Industry-specific vendors like Docupace offer compliant digital operations solutions for a variety of front- and back-office processes, including client onboarding and document management, helping enable remote work.
It gets easier from here.
Arguably, the wealth management industry has always embraced remote work. Consider all the players involved in a transaction, and how advisors are most often separated by a distance from the back office. In a sense, moving to remote work is more evolution than revolution.
But as working from home becomes more common, wealth management firms will need to quicken their pace on adopting the technologies that enable it — and make sure their workforce knows how to use those technologies.
“The biggest behavior change is breaking old habits,” Dani Fava, director of product strategy and development at TD Ameritrade Institutional tells InvestmentNews. “Now that advisors have no choice, they’re helping clients figure out how to use Zoom, and you can’t go back to not knowing how to do that.”
The same can be true for back-office employees who previously did everything on paper. Once people adapt to new processes, as they’ve been forced to do during the pandemic, new possibilities are unlocked in terms of operational efficiency and flexibility.
As an industry, we have no precedent for how to proceed in a post-COVID-19 world. However we do have a bounty of digital tools that will help wealth management firms get back to work — and, hopefully be more efficient and effective than than ever before.