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WealthTech will be here for a long time

1. WealthTech will be here for a long time. Not a chaotic time. Are you ready?

11 mins read

“Everyone has a plan till you get punched in the face” – Mike Tyson ( … apparently)

Markets. Banks. Tech start-ups. They all took a punch in the face in the last few weeks. Short-term chaos. But this is a weekly newsletter about WealthTech. Which will be here for a long time. Not a chaotic time.

WealthTech Wednesdays is for people who buy WealthTech. Those who work at financial institutions or Fintechs. Those who are tasked with implementing WealthTech need to choose a partner, buy a company, or build it themselves. (Tip: Don’t build, it’s very hard).

From what I’ve seen, it’s a mystery for buyers (Which vendor? How much should it cost? How long does it take? Who is the right fit for me?).

So, every week I am going to say it how it is. I’m here to be fully transparent and tell you all I’ve learned over 30 years of selling technology. In theory, as I have never been a buyer, maybe this advice won’t be that useful. But what I hope is that seeing it through the eyes of the seller will give you context.

As the weeks go by I’ll give a very candid and in-depth look at how we, as builders and sellers of WealthTech, think about the pitch. How to close deals with you. How we prepare to present to you. Even how we think you think! That should at least be entertaining for you.

Hopefully, this will improve your WealthTech experience; from sourcing to buying to building, along with integrating it to running it to marketing it, and finally, to success.

If you end up buying from us, sweet! If you don’t, that’s all good as well. There are a lot of great firms out there to buy from, such as InvestCloud, Quantifeed, FNZ, InvestSuite, Objectway, and many others.

Yup, I’ll promote all of us. As hard as it is to believe, Bambu isn’t the perfect solution every time. Talk to all of us. And don’t just hear our pitch. Ask about the reality of building it. What works, What doesn’t, etc. Super important to get context.

As Pitbull and Christina said,

“Ask for money, get advice. Give advice, get money twice!”

All right, let’s start with the most important, the basics.

Here are 8 key problems, examples, and solutions in your WealthTech journey:

#1 WealthTech is not easy

If anyone tells you WealthTech is simple, run a mile – it isn’t. It’s damned hard – hard for me and my team. It’s all we do. It will be extra hard for you because you probably have a lot of other work to do.

Example: Wealth used to be manual, human-led, and not scalable. When it went digital, we had to solve lots of issues all at once. Onboarding. Risk assessment. Funding. Fractional ETF. It’s a lot.

Solution: Break it down into reusable components. Don’t think of it as one build. Each component has a separate task. Build each, then assemble.

#2 Simple is best

Build an app that is simple for your customers to use and they will love it. Focus on the integration, that’s the real secret to an amazing product. The front end isn’t the hard part. The hard part is getting all the integrations right.

Example: The first Robo we ever built had 38 screens in the initial financial and portfolio planning. No surprise almost no one made it to screen 38.

Solution: Here is a secret. No one wants to buy your funds. They want a better financial life. The funds get them there. They are not the outcome. Make it as simple as possible for people to achieve their goals. (I’ll do a long-form post on this).

#3 Do not spend a penny if you don’t have a marketing budget

Do not spend a penny on WealthTech if you don’t have a marketing budget. It needs to be bigger than your tech spend.

“Build and they will come” is simply not true in this area.

Example: In Singapore, the two independent start-ups Robo’s, StashAway and Endowus went from a cold start to having billions of AUM. Meanwhile, the local banks with hundreds of years of history and clients lag behind.

Solution: Always have marketing in the meeting at the very start of the project. We have almost never seen marketing on day one of Robo projects. It’s often built and then given to marketing. Makes no sense.

#4 POCs are pointless

Don’t do them. It’s a minimum of 3 years (more like 5!) and probably forever. If you think US$50k for a POC is a good idea, it isn’t. Go all in and you will get the right outcome.

Example: We built a POC for a bank for US$50k. It cost us US$300k and the bank who tried their best had no budget to market it – so no one used it and we didn’t get the next deal. POCs aren’t logically designed to prove a concept.

Solution: Pay the start-up double whatever they ask for their POC. You will get quadruple the effort and it may work.

#5 WealthTech is expensive

If you think it’s cheap, save your money and shelve the project. If you don’t have millions, don’t do it as it’s a long-term bet.

Example: Many banks have spent US$20 million (or even more!) to build their Robo. They often find it didn’t work. It takes a deep team, knowledge, and tech infrastructure to run it.

Solution: This is controversial. Find a WealthTech start-up that failed and hire its people. They didn’t fail because they didn’t know. In the following week’s newsletter, I’ll tell you why they failed. Sadly, it’s partly your fault.

#6 Get your team fired up

We have worked a lot with Standard Chartered. Everyone there is super committed to the project. This makes a massive difference. If your team is not interested and committed, don’t do it.

Example: Standard Chartered. Just look at this post.

Solution: Be like Standard Chartered. 🙂

#7 Don’tthink you can build it yourself

With all due respect, you probably can’t. There is so much complexity in building WealthTech. Bambu and our peers have spent years figuring it out.

Example: See point #5. US$20 million to figure it out.

Solution: You get it right?

#8 WealthTech is the highest-margin business there is

It’s a huge win as you are enabling your clients to achieve their financial goals. If you do that, they will never leave you, and you get a lifelong recurring revenue client. A flywheel that doesn’t end.

Example: The ones who got it right. Fidelity Go. Schwab Intelligent PortfoliosE*TRADE.

Solution: We will send you a deck showing you the ROI on Robo done right. Click here to get it.

That’s it for this week. It’s a start. So much more to get across. Truly I just want to make it better.

Ned Phillips
Founder & CEO










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