Digital wealth management


The wave of digitalisation has not stopped at asset management. Digitalisation encompasses all areas of our lives and presents a tremendous opportunity for those who are prepared for it. It seems that an ever-larger number of investors are relying on the aid of technological platforms. In 2014, clients in the US handed over some USD 19 billion to firms that use fully automated asset management, and experts from Business Insider magazine estimate that by 2020, this figure will climb to 10% of managed assets worldwide. But can technology replace a relationship with an investment advisor? A middle-of-the-road approach is best. Most people still value the expertise of an investment advisor – but interest in digital solutions is growing. For this reason, hybrid advisory concepts that combine the best of both humans and machines are promising. And wealth management platforms are ideally suited to this task.


What opportunities do wealth management platforms offer?

Wealth management platforms provide not only a consolidated overview of client assets across all custodian banks, but also a modular design in general. This means they can take charge of every aspect of asset management or just individual areas. As a result, investment advisors can concentrate on their individual strengths and outsource tasks as they wish. Managers who are good at asset allocation should continue to rely on their knowledge, but they can supplement their expertise with comprehensive big data analytics in order to achieve even better results. Other tasks, such as suitability tests, can be left to the platforms – in compliance with all regulatory requirements, of course.

The increasing number of regulations creates a constant state of change, which places an enormous burden on asset managers. Why shouldn’t all the related tasks simply be outsourced? Wealth management platforms also offer comprehensive compliance solutions. This allows external staff – compliance officers – to assume tasks; for instance, verification of cash receipts. In addition, reporting can be fully automated. Risk management outsourcing offers further ways to boost efficiency. All these modules give asset managers the opportunity to focus on their core competencies. The time gained can be spent engaging with their clients more intensively or even expanding their client base. Investors also benefit from this digital system: when asset managers are able to concentrate more fully and work more efficiently, they achieve better results for their clients.


Simple investing with complete control

Clients like convenience and good investment advice. Filling out numerous documents to open a custody account or spending precious time at a bank or the office of an asset manager are not at all appealing. Various IT solutions simplify this system and make things considerably easier for investors. They shorten long processes and ensure time can be spent more productively, such as on personal consultations – which, of course, do not always have to be in person. Questions can be answered conveniently via email, live chat or by phone. This is how asset management platforms simplify contact between investors and asset managers.

Transparency is one more advantage offered by online platforms. No one wants to hand their money over to strangers, so security is vital in all areas. Wealth management platforms give this control back to investors. They can use an app on their smartphone or tablet to access all their information at any time – from their portfolio structure down to transactions. Of course, the asset manager has access to these overviews as well, which makes their job easier. No more mountains of paper to be archived. All important information is in a single place. This makes it easier to manage larger clients who have assets distributed among several custody accounts.


Digitalisation in asset management is changing the financial sector

All signs point to a change in the financial sector. Not only do young start-ups rely on technology platforms, major banks have also taken notice and now want a piece of the pie. Several institutions, such as Commerzbank’s subsidiary, Comdirect, are even investing in their own platforms. This clearly shows that whoever fails to get on board runs the risk of being labelled anti-innovative. As in all other areas of life, clients will soon become used to the ease of digital asset management in these segments as well. Even today, several digital offerings that only a short time ago were new are now taken for granted. Consumers are being offered conveniences that they will not want to live without in the future. Any firm that ignores these changes risks falling out of favour, particularly with young investors. Asset managers must recognise the opportunities afforded by digitalisation and take advantage of them. Evolute is here to help its clients do just that. 


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Topics: Digital wealth management

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