Major digitisation of the wealth management industry is needed if traditional sector players are to prosper in the future, a new report has claimed.

The study, released by FinTech provider Nucoro, pointed out that over £20bn of wealth from high net worth individuals is set to be passed on to their beneficiaries every year – yet up to 80% of wealth managers do not have an existing relationship with these beneficiaries.

Often Millennials, these beneficiaries expect to be able to manage their finances digitally, explained Nucoro COO and UK managing director, Nikolai Hack: “An unprecedented transfer of wealth is expected to be served by a shrinking pool of advisers. They will be dealing with a client base that is likely to need them to become more flexible and deliver a more modern and personal service.

“For the next generation, their needs and expectations are centred on interacting with their finances via digitally accessible platforms that link their money, their everyday lives and their goals to the future,” he continued. “Greater customisation of service levels will also be key here.”

The report, The Future Challenges for Wealth Management, also argued that the sector needs to go beyond simply moving physical into digital, and must “fundamentally rethink products from the conceptual to execution”.

This includes using technology to help meet regulatory requirements or assist with high volume administrative tasks, and adopting automated platforms to help facilitate business growth.

Hack added: “For wealth managers, technology and digitisation can be applied across all functions, from onboarding clients and portfolio management to operations and reporting. It also enables wealth managers to become much more agile and focused on the needs of clients. However, wealth managers need to find the right balance between digital and human services, and the key to success will be how wealth managers combine these two in order to meet the challenges now and in the future.”

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