Investment advisory services - wealth management - in particular, often refers to the specific guidance for the wealthy in terms of investment decision making, tax services, legal advice, and estate planning. Traditionally, wealth management has been reserved for affluent and high-net-worth individuals. Yet, today, it has come to clear light that all of us - rich and poor alike - need wealth management. 

In fact, those who aren’t indeed rich should manage their finances more carefully and strategically. With that said, is the notion of traditional wealth management a thing of the past? How has technology transformed these financial services into affordable, convenient, and accessible options for everyone to benefit, and will it contribute to a fairer society?

Technology infused wealth management 

We are in the midst of an evolution in the application, flexibility, and deployment of technology in wealth management. Whilst it’s true that technology has long since been an integral part of wealth management; it has typically played a supporting role for the internal needs of wealth management firms - such as portfolio and accounting management. Until recently, rarely did technology go further as to assist individual clients. 

There’s been a significant uptick in the development of solutions built for wealth management. From digital platforms to apps and Robo-advisors; the wealth management industry has been elevated.

Current trends center on mobile and digital platforms becoming the dominant business model for private banking and wealth management. Clients can now connect to their service providers in real-time, any time, anywhere; strengthening the relationship between client and relationship manager. 

Removing relationship managers altogether has been made possible through apps using artificial intelligence to generate, manipulate, and manage big data. Investment management platform ARQ, for example, lets users connect investments and immediately see how they are performing. It offers actionable insights generated from vast quantities of data and sheds light on what is considered to be a good annual performance and which fees are considered high.

Digitization has enabled processes such as onboarding to become better streamlined- resulting in improved efficiencies for clients and advisors alike. As well as staff training and better communication, access to information has paved the way for more productive conversations to be had. It’s been massively valuable to clients too. 

The digital transformation has enabled greater transparency. This, in turn, has transformed the nature of customer service by widening the gap between those who can provide customers with such transparency and those who can’t.

Artificial Intelligence and Personalisation in Wealth Management 

Personalized value-added services are in higher demand than ever before- especially when it comes to wealth. Think succession planning, wealth restructuring, wealth protection, diversification, family governance, alternative investment opportunities, and philanthropy. It could be argued that there is a short supply of capable traditional wealth managers to meet global and growing demand. 

Artificial intelligence, with its unparalleled capacity to augment wealth manager’s capabilities, can help. Insights through AI play a key role in personalizing a service- irrespective of the volume of clients to be served. Analytics and AI empower wealth managers to take on more, expand, and be more efficient. 

Indeed the value recognized by wealth managers in AI technologies has increased. In 2018, less than 7 in 10 saw AI as important in data analysis. Today, more than 80% see its importance in a broad range of areas. In addition to this, the application of AI in wealth management is not only appreciated by those in data analysis and operational efficiency. Rather it’s also embedded in many areas that are ubiquitous across investors daily lives. 

Source: Forbes Insights

Further, barriers to entry in AI have never been lower. App developers are utilizing the potential of AI to enable users to track their own investment portfolios, find intuitive visuals on their performance, and gain access to actionable insights. 

Not to mention the security perks that come with applied technology. Unsurprisingly, the financial industry has been wrecked with multiple cases of a breach in cybersecurity. The result - often immeasurable losses in revenue, trust, and confidence. Proactive hunting for threats using machine learning is now increasingly being adopted as more institutions recognize its intrinsic value. 

Making wealth management affordable 

As noted, wealth management services had traditionally been reserved for the wealthy. But the industry has been shaken and it can no longer ignore the effects of the rise of fintech. Investors have pumped over $100 billion into the fintech market over the past 10 years. Such investments are going towards the development of Robo-advisers and investment apps- predominantly used by millennials to track personal investments.

Costs have a track record of declining as technology makes basic services less expensive or completely free. Consider Robo-advising, for example, a relatively cheaper service for firms to deliver; making it less expensive for clients. Supporting this claim, the Robo-advising market is forecast to have generated an estimated $2 trillion in 2020. 

Making wealth management more convenient 

With the internet hovering within reach of us all, today’s clients are far more aware and better equipped to assess the options available to them. They can check, evaluate, and compare prices in real-time- pushing private banks and institutions to go above and beyond the price game. They differentiate themselves by focusing on client experience. 

Technology has both made DIY wealth management readily accessible and convenient through apps, bots, and online tools, as well as improving the efficiencies of traditional private wealth management institutions. Convenience is key to customer satisfaction and has therefore become key to such service providers. In other words, technology, here, has prompted more competitive and efficient financial services for everyone. 

Technology and enhancing customer experience go hand in hand. In fact, Temenos and Forbes surveyed over 300 wealth management executives and high-net-worth individuals about their views on technology. It was affirmed that just over 3 years ago, only one in four wealth managers believed digitization was essential for them to operate. Today, almost 70% say that a virtual platform is an essential way to enhance customer experience. 

Traditional Wealth Management as a Thing of the Past 

Lower costs and a reduction in the complexity of the financial services industry has lent to fintech’s ability to open the financial services doors to a larger, broader, and more diverse group of society. Gone are the days of high-net-worth individuals dominating the customer pool of the financial framework. New technologies have this far, made the industry more accessible to people from all financial backgrounds, wherever they are in the world. 

Automation processes have also allowed advisors to carry out complex work quickly and precisely. Meaning, they are able to serve a higher volume of clients, drive costs down, and improve customer service - contributing to the convenience.