WealthTech: Merging Wealth Management and Technology

It’s hardly contestable that money makes the world go round. Emotions often run high when money is involved, and humans, by nature, are not rational creatures. With an abundance of information on financial products fed to investors, they’re often expected to make a rational decision with or without proper financial literacy. How can wealth advisors support their clients through the daunting task of choosing the right services? The answer lies in technology. Let’s look at how strategically utilizing digital wealth management tools can result in a comparative advantage for your business.

Using Technology to Demystify Wealth Management

The wealth management industry boasts a variety of products and services which can be confusing for those who are venturing into financial planning for the first time. Thankfully, digital advisors can help to demystify this landscape, making the process of saving and investing much more accessible.

Instead of overwhelming investors with exhaustive information about financial products, presenting investments as a route to reach a goal is likely to be more productive. With life goals and events unique to each individual, a goals-based investing approach can help to guide clients in the right direction and trajectory. Helping clients to manage emotions and expectations can make building wealth much more encouraging. Technology can be optimized to enhance portfolio management processes as AI/ML could be used to provide relevant predictions and analysis quickly and cost effectively.

Confidence is critical for investing. Before investors decide on the best wealth management firms for their needs, they need to know their money is managed by someone they can trust. Ben O’Leary, Co-portfolio manager at Marcus Today, shares that he uses digital platforms to facilitate a trusting and transparent relationship with his clients. Marcus Today takes full advantage of these platforms and produces podcasts and webinars for clients to better understand the company’s purpose and values. By creating avenues of communication directly with clients, they’re more likely to develop a relationship and are more willing to invest with particular firms.

Simplifying Through Personalisation

In order to make financial products more accessible for investors, firms can use technology to personalize advice and target clients with specific services. Anthony Caneva, General Manager of IOOF Holding Ltd, believes that everyone is at their own unique point in their wealth journey and it’s essential to start clients off wherever they are in that journey. As they pursue their goals, digital health check features can track their progress and offer customized advice should they face any hurdles along the way.

To go further, Oliver Berthier, founder and CEO of Moneythor, shares the power of behavioral science in personalization on an episode of WealthTech Unwrapped. He lists 3 noteworthy techniques: accessibility, desirability, and feasibility. Accessibility is essential as customers need to be able to view their personalized data efficiently. Desirability is a quality that’s often forgotten, and wealth managers need to remember that the outcome of personalization has to be positive for the consumer. As for feasibility, the personalized advice needs to be within a client’s means

The Onus is on Wealth Managers

It’s evident that digitally active and engaged consumers are increasingly profitable. It’s important that wealth advisors are able to reach out to these segments with appropriate wealth management solutions, and provide a sense of clarity and direction in what’s otherwise an overwhelming landscape.