A Digital Step towards Wealth Management

A Digital Step towards Wealth Management- Insights Success

Wealth has found an utmost importance in human life and as well as in organizations life-cycle. The human creation i.e. wealth, is now driving humans for its management due to the faster rollout of new technologies for human capital management in the market. Keeping pace with competitors in the marketplace, wealth managers are now opting for technology-based solutions for the management of assets and wealth of an affluent investor or of organizations. Succeeding in the management of wealth, in today’s era, is only possible by combining human brain with technology i.e., ‘Digital Manager’.

In many areas, digitalization can add significant value for wealth managers: digitally enhanced client relationships, increased front-office productivity and middle- and back-office operational excellence.

Digital manager can cope-up with the present management need for virtual capital and physical assets by deriving solutions through scratches such as Robo-advisor model and Human Aid Digital Manager. These automation models are enabled by the creation of state-of-the-art software, which has helped in making wealth management more companionable, cost-effective and approachable for the consumers. The Robo-advisor automated model is appropriate for the investors whose wealth accumulation is less than $500,000 in the household while a wealth management model that combines the best breed of automation with human advisory is suitable for the greater level of wealth i.e., greater than $500,000 in the household.

Robo-advisors are representing themselves as ‘Uberization’ in wealth management, providing a real, automated approach. Many service providers offer streamlined virtual investment platform, where Robo-advisors collects feedback on investor’s risk tolerance, goal, the time horizon for investment and various background demographics. The collected feedback helps Robo-advisors design suitable investment strategies for the lower strata of the wealthy world, whose tax needs are less complex. The Robo-advisors are gaining popularity due to lower cost of implementation and ease-of-use. In-spite of these efficient services, Robo-advisors fall short in the set-up of a physical meeting of an investor with Robo-advisor fully automated model to review account-related problems and it can’t fix the evolving challenges out of its boundaries. Robo-advisors are not geared-up for a personal level of interaction and strategy utilization when conditions get changes during the course of investment.

By keeping in-sync a technology-driven model and a human advice element, wealth manager becomes able to offer a more holistic approach towards wealth management.

Organizations and investors need cost-efficient, tax-savvy investment automated software but also require human brain involved in making the strategy or the ultimate call for the personal & professional investment plans. With direct human involvement, these automated software’s are now able to consider investor’s personal goals such as, lifestyle living after retirement, factors in another aspect of wealth management like life insurance and tax planning for the mass affluent baby boomers who have accumulated millions in their saving accounts and have complex financial situations. So, with technology enablement, human advice has become a necessary component of personalized and professional wealth management. This approach goes much deeper than applying several algorithms to trade and to re-balance an investment action-plan.

Objective based software’s require greater sophistication as it must be able to simulate infinite wealth fluctuations of real-life scenarios, which can analyze goal values and investment results. Objective based engagement adds a personal touch and the underlying software helps its client to navigate through myriad life events and market outcomes. By keeping together, a technology-driven model and human advice element, wealth managers becomes able to offer a more holistic approach towards wealth and assets management.

There are numerous advantages of using automated & human-aided concept:

  • A firm is capable to provide a clear picture of an investor or of an organization’s financial situation at any point along their financial journey by using those automated and human-aided software.
  • Additionally, these processes automatically signals advisor’s whenever there is a software update plan or make mid-course corrections, for greater outcomes through proper and well-mannered investment plans.
  • The software simulation technology is able to analyze millions of randomized market outcomes, testing of the worst and the best case scenarios, and reporting back an accurate investment test scores to the client.
  • At any stage of time, clients will know about the portfolio and where they stand, as it purely relates to accomplishing clients & organization’s personal & professionals goals.
  • When there will be a change in strategy, objective based advisors will recommend steps to its clients, which are to be taken to keep their plan of investment on a wealthy track and maximize the ROI.

Digital wealth management will continue to reshape the industry.

The disruption of technology in finance and banking field seems to be very helpful from the investor point of view. As an investor, it can give a 360° view of its portfolio in any situation at any point of time and can make changes according to situations. Software automation is helping various investors to acquire auditability and traceability, and also reduce the overall potential liabilities, if investment strategy matches with the client plan of investment. Organizations and clients are still in the early innings of a major industry transformation with technology and regulatory changes acting as dual-driving force. It’s going to be very interesting to watch it all play out and at the end of the day investors are going to be the biggest winners.

Real-time portfolio data can provide automatic-alerting regarding corrections to ensure ongoing suitability of investments.