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How can Wealth Managers and Customers Benefit from Wealth Tech?

Defying Expectations

Robo-advisors global AUM is expected to reach the US$1 trillion mark in 2020 and quadruple to US$ 4.6 trillion by 2022. 

The rise of Robo-advisory is evident. Now more than ever, it is critical for wealth managers to grasp the opportunity or face getting left behind. 

But of course, it is only natural for us humans to be a little hesitant about automation. Contrary to the general assumption, technology solutions like Robo-advisors create a win-win scenario for wealth managers and clients. 

The Shift has Started 

Robo-advisors are perfectly aligned with the needs-based investment trend. It is a fact that more and more investors are moving towards this approach, and Robo-advisors are perfectly positioned to capture this wave. 

Treating customers fairly is something we’d expect businesses to practice. Unfortunately, a survey conducted on clients would prove otherwise. 

Gallup asked respondents to rate people’s honesty and ethical standards in various fields on a percentage from low to high. The average ratio for those in the financial sector was only 28%. Edelman also conducted similar research called “Global Trust Barometer Survey,” the results showed that financial advisory is the least trusted by clients (Figure 1).

Figure 1: Low Trust in Segments of the Financial Services Industry

(Source: Edelman)

Although customer protection has been around for a long time, firms still did not fully embrace it as a strategic tool to reduce poor customer treatment. Eventually, it tainted the perceptions and trust that customers have in financial institutions.

That is why government bodies and regulators worldwide are implementing policies like the ‘Treating Customers Fairly (TCF)‘ initiative, ensuring that firms consider the customer’s interests and treat them fairly. In turn, it should build the customer’s confidence in financial institutions. 

Robo-advisors are designed to support these initiatives further. The client’s needs are considered for all investment decisions to ensure the best option available. Not only that, but all recommendations are free from any merits-based motives. 

Whether today, tomorrow or years down the road, wealth managers will have to integrate digital wealth solutions into their offerings. The Shift has already begun and it’ll only be a matter of time before the market becomes concentrated with competitors. 

Win-Win Scenario for Wealth Managers

Integrating Robo-advisory into their offerings can bring out many benefits, namely: scaling up and utilizing analytics. This is even more critical in the current world, where wealth managers are swarmed with pressures from all directions. 

Expanding the Market

With Robo-advisors, wealth managers can reach more clients at a manageable cost by digitalizing their value chain. Younger generations and lower net worth individuals were unable to receive financial advice due to their asset limitations. With the low fees and ease of use, the world of financial advisory has been opened to them.

Although this group of customers may not generate the desired ROI like HNWIs, it is more about customer acquisition early in their wealth journey. Wealth managers will then nurture the relationship and guide these Millennials up the wealth ladder to be the HNWIs of the future. It is all about giving up short-term gains for long-term profitability.


Recently, there’s been a phrase circulating saying that “data is the new oil,” and it just might be. Turning customer data into actionable insights might give any financial firm the advantage it needs to compete in the competitive market. 

The application of advanced analytics is providing value to financial institutions worldwide. With data, managers can make quick and reliable decisions to serve their clients better.

Figure 2: Analytics is Key Factor in Decision-making

(Source: Deloitte)

There is a wide range of ways in which data can be utilized. A majority of firms have incorporated analytics for operational efficiency. At the same time, others are using data towards more data-driven processes such as sales and marketing. In both cases, it has shown that better investment decisions (Figure 2) were made and increased productivity in the middle and back office. 

But how does that work with Robo-advisor? 

Robo-advisors are smart. The client’s questionnaire analyses the data and recommends investment solutions according to the client’s needs and goals.

Compared to humans, Robos can analyze thousands of variables simultaneously and efficiently. Some variables considered include demographics, timing, historical trends, technical analysis, fundamental analysis, market sentiment, and more. 

Now it is not to say that human advisors no longer have to analyze data. They still do. With the data collated by Robos, wealth managers are in a position to understand their client better – What’s their lifestyle; Where’s the trend heading towards; What are their needs and goals? 

They can then strategize and find ways to curate investment decisions, risk management, and improve their advisor-client relationship.

Figure 3: Does Analytics Improve Competitive Positioning?

(Source: Deloitte)

Data and analytics can determine a firm’s position in the market. It is known to improve a firm’s competitiveness if it is properly harnessed and utilized. According to a survey conducted by Deloitte (Figure 3), 55% of respondents said analytics had improved their competitive positioning. 

Seeing the power of analytics, 86% of wealth management firms surveyed have increased their data and analytics spending over the past three years. 

Win-Win Scenario for Customers

The clients mainly benefit from these three features: high-quality portfolios, ease of use, and low fees. 

High-Quality Portfolios 

Before Robo-advisors, personalized portfolios were an exclusive offering only available to the HNWIs and UHNWIs of the world. But now, it is open to everyone of any income background. 

At the core of these portfolios are low-cost index funds such as exchange-traded funds (ETFs). These low-cost index funds give investors an 80% – 90% chance of outperforming other investment types. Why? Almost five years after the introduction of Robo-advisors, nearly 100% of their AuM consists of ETFs. 

Robo-advisory is not about timing the market; it’s about time in the market. They are utilizing Nobel Prize-Winning investment models to determine the best investment strategies for clients. It is all about creating an investment portfolio with the best returns and lowest risks, suitable for all clients, no matter where they are on their wealth journey.  

Ease of Use 

Appealing to the client’s digital preference, the whole investment process is easily accessible through a digital interface- mobile applications and websites. Everything from opening an account to determining the investment strategy is fully automated. 

Robo-advisors will do all the work so investors can focus on what matters to them, whether that is a passion, job, or spending time with loved ones.

Low Fees

And last but not least, the prominent selling point of Robo-advisor is the low fees compared to traditional advisors who charge 2% – 3% of AuM for the management fee. It was a once in a blue moon opportunity if anyone could receive professional advice for less than 1%. But now, that is the norm.

Make the win-win scenario a reality for both you and your customers. 

At Bambu, we specialize in developing Robo-advisory solutions for the financial services industry, from smaller RIAs and wealth advisors to some of the world’s largest banks. We help our clients work through the above vital considerations to implement solutions that genuinely benefit their wealth management business. 

To find out more, check out our product here or contact us at for more information.










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