Harnessing tech to drive the next revolution in wealth management

By Valuefy

September 26, 2018


The wisdom of the web: The future of wealth management is data-driven

The idea of comparing and reviewing something online before making a decision haspermeated indelibly into the decision-making process of a millennial. Be it buying a hometheatre, getting health insurance, renting a home, or buying a car. The consumer of today isspoilt for choice, they make their own decisions, do their own research, and rely on the power oftechnology to make judgements, be it big or small.

Why should wealth management be any different? The investors of today rely on advice from a host of sources while making any financial decision. They seek advice online, through blogs, forums, news, social media, stock trading platforms and peers before any buy or sell.

People are increasingly soliciting financial advice online and are comfortable making decisionsleveraging on their digital outreach. In this landscape, it becomes essential for wealthmanagement firms to markedly differentiate themselves by providing in-depth analysis and datato back up every decision.

Information overload: The crippling effect

However, when it comes to relying on multiple sources to make a decision, there is always a crippling effect due to an overload of information. Financial advisors and Portfolio managers often suffer decision paralysis due to the overwhelming amount of information available on the internet that confuses rather than helps the reader. This often leads to a bias for inaction, rather than action.

The unlikely savior: AI-based Robo advisory

Robo advisory, financial advisory tools that leverage proprietary AI and self-learning algorithms to create customized portfolio recommendations, are becoming the preferred research and decision making platform for the tech-savvy investor.

It is a technology solution that is breaking new ground in the wealth management space as it combines the benefits of going to multiple news sites, channels, review sites, and neatly delivers it in the form of actionable advice and intelligence.

They are also equipping traditional wealth management firms with the power to base their financial decisions on data and analytics rather than instinct. Robo advisors are helping clients such as financial institutions, wealth management firms and even the average investor automate a large portion of the tedious research that goes into investing.

The promise of better tomorrow: Chasing the alpha

It is clear that the combination of machine intelligence and human instinct can prove to be a winner for investors across the board. While they are not a one size fits all solution, the level of customization and goal setting offered by new age Robo advisory platforms are helping investors integrate Robo advisory inputs into a holistic investing strategy. As algorithms keep evolving and getting better, the day isn’t too far when technology can help investors beat the market consistently.
The ‘Investment Technology’ industry is still in a very nascent stage in India, with a large number of firms yet to adapt to the paradigm shift. Players such as Valuefy are leading the pack in driving Robo advisory and technology based investing in India, with over 30 leading financial institutions on board. Market leaders such as Kotak AMC, Aditya Birla capital and Waterfield advisors have partnered with Valuefy to power their Robo Advisory.

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