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Technology in Wealth Management

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New technologies disrupt our lives at regular intervals. First, it was the industrial revolution in the early 20th century. Then the automobile revolution. The advent of computers and the internet changed how we did things at work or home. The world of investing was no exception. It transitioned from physical, local-based trading to your pocket in just a few decades. You can now automate the process of investments with ease.

The acceptance of technology in wealth management is increasing. The lead for that comes from the level of comfort that customers feel while using technology. An annual survey of retail investors across countries by the CFA Institute found that most retail investors believe access to the latest technology tools to manage their investments will be more important than access to a human being in the next three years. About half of retail investors and more than four-fifths of institutional investors felt technology has increased trust in their adviser or asset manager.

That is good news for the trillions of dollars under management through passive and active wealth management. When customer comfort drives a change, it is usually transformational.

Several factors appear to have contributed to that increase in trust. Stock markets witnessed an unprecedented boom as markets were awash with cheap money due to near-zero interest rates in the US and the rest of the rich world. While that is changing as interest rates are hiked to tame surging inflation in the rich world, passive investing and discount brokerages have improved the fee structure for ordinary people cutting barriers to entry. They have access to new investment products like never before. The easy availability of financial services products allows individuals to play market cycles correctly.

The use of technology is also easing access to credible information and inducing transparency in trades. That fundamentally pushes up the confidence of ordinary folks. They are learning about markets through a content stream that allows them to understand global and local economic developments and connect the dots. You can be on top of developments in India during the day and Europe and the United States in the evening.

The other aspect of the use of technology enables fractional investing. Small individuals can own shares of iconic companies in parts and receive the benefit in the same proportion. Similarly, they can access quality funds through innovation led by fintech companies.  Here’s where we at Alphaniti help you choose from a host of  products to start investing.

The other key factor of technology use is the personalisation of investment products. Using technology to suit your needs and goals, you can create an investment basket. The survey points out that such things gave investors a greater connection to how their money is being put to work.

All these things have contributed to the increase in customers’ confidence levels. Investment advisors and wealth managers must embrace technology to enhance the investment experience further.


Enhancing Investors Trust | CF Institute

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