Disruptive Trends in Wealth Management II

What is robo-advisory and how is it disrupting the WM industry?

Robo-advisory is essentially automated wealth advice that is provided to clients without any human input. It is attractive to clients because the lack of human interaction means lower fees and lower minimum investments. As a result of robo-advisory, clients can now be much more involved in their investment process and also helps firms be more efficient and appropriate with their selection of investment for each client. It also helps automate and speed up processes. It is crucial for traditional managers to understand and incorporate this into their offerings. 

How can the entry of big tech firms entering the wealth management sector disrupt the WM landscape?

Customers are recognising the lack of personalised interaction and information from incumbents in the WM industry. Big tech firms on the other hand have vast volumes of customer data and this can help in personalisation, or “hyper-personalisation”. Big tech firms can use this advantage to weaken the position of incumbents in the market. These tech companies may integrate financial services into their existing offerings, taking advantage of their highly engaged customer base

How is ESG investing disrupting the WM industry?

The ever-increasing spotlight on sustainability and climate change will continue to alter the landscape of wealth management. Modern investors are keen to respond in a socially conscious manner. Hence, this era of disruption can lead to significant opportunities for global wealth managers. Investors are now insisting on ESG integration.

What is ubiquitous investing?

Ubiquitous investing involves of increased personalisation through digital touch points, products and services. Customers can access their investments at any time, anywhere. This is like a ‘relationship-first’ approach as opposed to a ‘revenue-first’ approach. Traditional wealth management firms would need to start enabling and incorporating technology to empower their advisors such that they are able to not only access this data and wealth of information but are able to strengthen their client relationships.