When the winds of change blow, some people build walls and others build windmills ― Chinese proverb

There’s a lot of money to manage in this world, about $471 trillion US dollars according to the latest UBS Global Wealth Report 2025, and well over a third – $175 trillion – sits right here in our own back yard.

Last year Henley Global’s World’s Wealthiest Cities Report 2024 broke down US wealth distribution by individuals and location:

All this wealth should be good news for investment outsourcers as nonprofits and the nouveau wealthy look to offload their investment headaches.  But deep-pocket competition and advances in knowledge-based technologies are changing the game.  It’s no time for complacency.

Bots and bolts

Not long after we published our latest OCIO directory, I got a call from the president of a large west coast foundation, unhappy with their OCIO provider’s performance and especially unhappy with the service.

The president explained that they might have stomached the last few years of mediocre returns if communication were timely and forthright, but apparently service was half-hearted and the board had had enough.  They are reviewing alternatives.

In the good old days – before TikTok and cat videos – sales, service, and steady returns were the nuts-and-bolts of money management.  When Hirtle Callaghan, Commonfund, McMorgan & Company, and Strategic Investment Group hung their shingles the outsourced chief investment officer concept was fresh and intriguing. Still a tough sell, but the field was wide open.

Twenty years ago, when the Princeton Theological Seminary asked me for OCIO referrals I sent the school eight names.  Today there are one hundred-eleven firms on our list, and chatbots, robo-advisors, Zoom, and cloud-based access are essential parts of the full-service landscape.

Baby boomers and Gen-Xers still crowd the boardrooms and family seats and most still prefer the human touch, but how and with whom will the next-gens invest?

Digital natives, those born in the internet age – Millennials (1980–1995), Gen Z (1995–2010), and Gen Alpha (2010 – present) – grew up with tech.  As long as their assets are globally accessible, secure, and returns pay the bills they don’t seem to care much about human contact.

So, will AI replace human empathy and intuition as Mr. Zuckerberg envisions?  Will “Her” soon be our most trusted companion?  If so, who or what will manage our money?

Digital shadows

“Most wealth managers say they want more clients.  But too often, they wait for them to show up” notes the Boston Consulting Group.  But, says BCG, there are powerful tools on the horizon to support business development.

GenAI-powered prospecting engines using external data can identify and profile business owners, expats, and high-income professionals and track digital indicators that suggest investable wealth, such as business sale filings, job changes, bursts of luxury travel reviews, and niche signals like luxury car forums.

“The engine doesn’t just find names, it prioritizes them.  An internal scoring system ranks each lead by value and likelihood to convert.  High potential prospects can be routed directly to the most suitable advisors, complete with customized outreach packs.  Every interaction – open rates, meeting conversions, follow-ups – is tracked and fed back into the model, so it gets smarter over time.”

Noah Smith, in his piece “The dawn of the posthuman age” writes:

“When I was a child, sometimes I felt bored; now I never do.  Sometimes I felt lonely; now, if I ever do, it’s not for lack of company.  Social media has wiped away those experiences, by putting me in constant contact with the whole vast sea of humanity.  I can watch people on YouTube or TikTok, talk to my friends in chat groups or video calls, and argue with strangers on X and Substack.  I am constantly swimming in a sea of digitized human presences.  We all are.”

Final thoughts

After years working with OCIOs we’ve observed that once stand-alone OCIOs hit their comfort level, growth usually stalls.  Complacency and poor business development are almost always the cause.

Banks seeded their OCIO units from legacy trust and private banking relationships, venerable wealth advisors like Brown Brothers Harriman, UBS, Morgan Stanley, and Goldman Sachs augmented their established client service and distribution channels with OCIO capabilities, and consultants formed OCIO teams to piggy-back off their consulting network.

But the CIOs who jumped the fence from nonprofits to for-profit startups never had to market or sell their wares, the business came to them.  They’re not comfortable hiring client development talent.  Never had to.  Wall Street metrics like client acquisition, distribution channels, product innovation, and profits are heresy in the nonprofit world.

The OCIO story is a compelling proposition for many institutions and high-net-worth families, but times are changing.  If you are not taking care of your customer, something else will.