By Franzi Schroder, with contributions from Ben Hammond.
For many wealth and financial services companies, the question is no longer whether the operating model needs to change, but how to manage it without introducing risk. Arguably, it’s something that should always be evolving, but in our experience a Target Operating Model, or ‘TOM’, review tends to arise following a trigger event.
Regulation is a big part of that pressure. The Financial Conduct Authority’s Consumer Duty has raised expectations around customer outcomes and transparency, while firms continue to manage increasingly onerous obligations regarding anti-money laundering (AML), data protection, and cyber resilience. Market and commercial shifts are prompting companies to rethink how they operate, whether driven by consolidations and mergers, segregation of entities by geography, or the rationalisation of services leading to the sale of entities. Evolving client expectations are triggering change as well.
“Clients expect faster, more transparent, and increasingly personalised experiences. Everyday consumer banking apps such as Monzo make it so easy to transfer money between parties. While wealth management is unlikely to ever be quite this simple , the kind of experience that can be achieved should inspire the next generation of wealth platforms.” according to Ben Hammond, Wealth and Partnerships Director at AheadMG.
At the same time, the shift towards more automated and data-driven services is exposing the limits of legacy manual processes, data silos, and fragmented systems, leading companies to make changes.
The result is a familiar challenge: how to evolve the operating model in a way that is both practical and deliverable. A TOM provides a clear direction, however the real challenge is how it’s defined, how it’s delivered, and how we can ensure it’s a success.
What sits behind a successful Target Operating Model?
At its core, a TOM defines how a business delivers value: what it sells, who it serves, and how it operates. Getting there means taking a joined up view across People, Process, Technology, being clear on roles and responsibilities, understanding how customers buy and experience products, and how the underlying technologies are accessed and supported.
At definition stage, consider:
- What are you selling, to who, and how.
- How is the platform run, where, and by who? What level of control do you have over its functionality?
- How are user journeys currently assessed? How do customers buy your products and services and is it as easy as it should be?
- What are the industry benchmarks? What are you missing that competitors have or excel in?What capabilities are we missing?
- How does your technology interact and integrate? Is it as slick as it should be?
- How are non-standard items managed? Do your standard systems cope well with, or appropriately flag, anomalies?
- How are key risks identified, mitigated, and managed?
- What environments do we need if we don’t have the right infrastructure today to facilitate change?
- What are the current contractual arrangements, and will these need to change to support the overall proposition?
Delving into these elements early and with the right expertise around the table drives a model that not only supports the strategy today but grows with the business over time.
“Be ambitious. Your operating model, and how well you execute it, will define your ability to attract clients and drive growth. This is not the time to rush.” added Ben.
Delivering on your strategy
Designing a Target Operating Model is a structured exercise. Delivering it rarely is.
Most programmes don’t lose momentum at the strategy stage. In our experience, it tends to happen when an organisation begins moving towards the target model and the realities of delivery take hold.
At that point, tensions emerge. Teams are balancing transformation alongside the day job, stretching capacity. Stakeholder priorities don’t always align, making decision-making slower. Established ways of working take time to shift, even with a clear end state. And all of this happens while regulatory and operational responsibilities still need to be maintained.
If not actively managed, these pressures will slow progress and gradually shift delivery away from the intended outcome.
How effective TOM delivery works
From an execution perspective, TOM delivery is less about following a fixed plan and more about guiding an organisation through change in a controlled way. Based on our experience, there are a few areas that consistently make a difference:
1. Matching delivery to the organisation’s capacity for change
Not every organisation moves at the same pace. Some can absorb change quickly, while others require more alignment and governance.
Understanding this early is critical. Push too fast and resistance builds – confidence erodes; move too slowly and momentum is lost, priorities shift and belief in the programme wanes. Effective change programmes are shaped around the organisation’s capacity for change , not just a textbook plan.
2. Treating stakeholder alignment as an ongoing activity
A TOM programme cuts across the business, from operations and technology to risk and front-office teams. It’s essential there is alignment, and that it isn’t a one-off exercise, rather it needs to be maintained throughout.
That means clear communication, regular engagement beyond formal forums, and helping teams understand how the change affects them in practice. Informal influencers often play as much of a role as formal stakeholders in driving adoption.
3. Maintaining clear governance without slowing delivery
As programmes scale, decision-making can become fragmented. Working groups form, discussions move into detail, and it becomes less clear where decisions should sit.
Effective governance provides the structure to manage this, keeping decisions timely and anchored to the agreed model, while ensuring teams continue to move in the same direction. Without that structure, programmes can gradually lose focus and start to drift, particularly over longer timelines.
4. Building operational readiness from the start
Operational readiness is often treated as a final step. In reality, it needs to begin much earlier. From the outset, programmes should be thinking about:
- How new processes will actually be implemented.
- Where additional support or training will be required on the ground.
- What adoption will look like across different teams.
By the time changes are implemented, the organisation should be fully prepared to operate within the new model.
5. Delivering iteratively to maintain momentum
Most TOM change programmes run over 12–24 months. Trying to deliver everything in one step increases risk and delays value.
A staged approach allows firms to:
- Introduce change in manageable increments.
- Validate what is working, and importantly, what’s not.
- Adjust requirements based on feedback and real-world use cases.
This approach also helps maintain engagement, as progress is visible throughout.
Bringing TOM design and delivery together
A Target Operating Model defines a future state. Its value comes from how well that future state is delivered and embedded into day-to-day operations.
Programme leadership plays a central role in making that happen. TOM delivery is rarely straightforward: priorities shift, dependencies build, and different parts of the organisation move at different speeds. Maintaining a clear, joined-up view across the programme helps ensure decisions are made at the right time and delivery stays aligned to the intended outcome.
A key part of AheadMG’s role is recognising early signs that momentum is beginning to slow and acting before they become systemic issues. .Whether the root cause is stretched teams, competing priorities, or delayed decisions. At the same time, delivery must strike the right balance between progress and oversight, particularly in regulated
Ultimately, success comes down to whether the model holds up under real conditions, not just on paper, but in how an organisation operates day to day. In financial services, where complexity is constant, and scrutiny is high, the ability to translate a well‑designed operating model into sustainable, lived reality is what truly differentiates successful transformation.
A strong and effective operating model means a business will improve speed to market and have a higher chance of successful delivery.
If your organisation is designing or delivering a Target Operating Model or needs support moving from concept to test to delivery, we support firms at every stage of the change lifecycle. To learn more or book a call, contact us at enquiries@aheadmg.com
