What to Expect from Wealth Management Platform in 2020?

Posted on December 18, 2019November 15, 2022 by Valuefy

2020 promises to be a year of fundamental shifts for the Wealth and Asset management industry. The evolving technology landscape and digital transformation of the industry will lead to a number of significant changes in the way that wealth managers operate. Here are some of our predictions for the coming year.

Costs to stay in Business will remain high, Platforms will find new Efficiency

The costs of complying with regulations in the wealth management space will remain high. The growing cost of doing business will put continued pressure on firms to drive up profits. However, competition pressures will lead to lowered fees and cannibalization of the market. In this scenario, wealth management firms will have to invest in technology such as wealth management platform and data to maximize alpha for customers and justify higher management fees.

Passives will become core Investment Channel, Platforms will help Wealth Managers compete

It is predicted that by 2020 close to 35% of assets under management will be pooled into passive investment products such as index funds. ETFs and Mutual Funds will also see steady growth. As investors increasingly invest in passive products, actively managed funds will be under pressure to show a higher alpha. This higher alpha can only be generated if investment decisions are made on hard data that helps wealth managers make quick and reliable judgment calls that can beat the market. The power of terabytes of historical data can be leveraged by wealth managers that use Robo-advisors. These Robo-advisors can give recommendations in real-time and can raise red flags when portfolios are not performing. This will help de-risk investment strategy and help increase the chances of creating value for clients.

Platforms will help Wealth Management Firms improve transparency and gain Client Trust

Clients of today expect transparency in investment decisions. They are no longer happy to rely on Wealth Manager’s decisions alone and need hard data backing up any investment strategy. Wealth Management platform gives wealth managers all the data they need at their fingertips. This means that the chances of making decisions purely on instinct are greatly reduced, this fosters greater trust in the clients. Clients can also use Wealth Management platform to check their portfolio performance at any time 24X7 and ask the Wealth Manager questions proactively instead of waiting for a monthly call or meeting.

Platforms will help meet higher expectations of On-demand Customer Service

Clients who have grown familiar with an ‘app economy’ expect service to be available to them 24X7. In such a scenario, wealth management platform that helps customers get visibility into their portfolio data will give an edge to ‘digitally enabled’ wealth management firms. These platforms also help in automating mundane front office and back-office tasks helping free up manager time to focus on strategy and servicing their customers. This is especially crucial in a climate where over 87% of HNI clients confirm that they switch wealth management firms for lack of satisfactory customer service experience.

Mobile Apps and Customer Portals will become par for the Course

Clients of today are increasingly tech-savvy and need access to their portfolio data on their fingertips. Wealth management platform can no longer be solely facing the wealth manager, they need to have a customer-facing presence both as a portal and as an app. These mobile apps must have key functionalities such as rebalancing, portfolio monitoring, withdrawals, etc so that customers are empowered to make their own decisions. Investing in online platforms and mobile apps should be a top priority for Wealth Management firms as less than 50% of HNWI reported being satisfied with their current online and mobile financial platforms

5 Things To Look For In An Effective Wealth Management Software

Posted on November 15, 2019October 30, 2023 by Valuefy

Over the past decade, wealth management as we know it has undergone a digital transformation. Wealth Management firms, family offices are increasingly recognizing that in the digital now, the legacy systems of the past just cannot keep pace with customer demands and expectations. Clients are now looking for complete transparency on how their money is being invested, they also want to access this data at all times. They also expect their wealth managers to give their hard proof and data backing every single financial decision. It is no longer a ‘seller’s market’ and investors are asking for maximum bang for their buck, especially when they are going for professional wealth management services.

In this challenging environment, wealth management software has come to the aide of wealth managers. The firms that are embracing innovation are increasingly looking to the tech industry to build solutions that help them scale and meet customer expectations. Undergoing a digital transformation is one of the most critical business decisions that a wealth management firm will ever make in its course of business, hence it’s essential to evaluate the platforms comprehensively to every minute feature before adopting it.

We’ve developed this guide as a quick primer of what to look for when on the market for a Wealth Management platform. This checklist will help guide your search and help you zero in on exactly the kind of features and tech capabilities that your firm needs.

Is it Mobile friendly with anywhere, anytime access?

This is one of the most crucial considerations for both your wealth management clients and your time-pressed advisors. The platform should have a client-facing and advisor facing app or mobile presence that allows both advisors and clients to access and control their portfolio from a mobile phone. This unfettered access can be a key variable in whether tech-savvy millennial investors choose to invest with your firm.

Does it help the synergy between the front office and back office?

The system you adopt must be able to integrate with all the disparate tools your wealth management team uses in front and back-office operations. The advisor must be able to quickly source the data that he wants from the system in seconds and show the client their real-time account data. It should also allow for a full API system that allows third-party applications to function seamlessly on the platform.

Does it save your advisor’s time?

The number one reason why wealth management firms are going for digital transformation is that advisors are increasingly under pressure. As a single advisor caters to 10s, the 20s or even 100 clients, every second of the advisor becomes valuable. If the advisor has to spend hours reconciling portfolio data, the investor will lose patience and the advisor will be unable to leverage their bandwidth for customer servicing. Wealth management software or platform helps advisors automate mundane tasks and carry out others efficiently such as Client Onboarding, portfolio attribution, rebalancing, compliance, reporting, document management and more.

Is the system cloud-based?

Legacy systems are cumbersome to maintain and update, it can take months of time to upgrade to the latest technology and can also incur significant costs. A cloud-based SaaS platform, on the other hand, receives regular updates and can be updated in a matter of minutes. Also, as all of the upgrades are done at the Service company end, there are no additional costs involved in hiring talent to make sure the systems are up to date, secure, and running optimally. Cloud-based systems also allow users to access the data from anywhere and with any kind of device, removing the dependence on company owner hardware.

Is the user experience easy to navigate?

Often, the senior talent at Wealth Management firms may not be very tech-savvy and may prefer to work on their excels and workbooks if they find the technology difficult to adopt. Just rolling out the platform is not sufficient, the advisors must be convinced of the benefit and they must be comfortable with the interface. Otherwise, the platform becomes a liability and leads to parallel processes running within the organization. The UX of the platform must be intuitive and consumer-grade, the advisors must also receive comprehensive training and support in the adoption phase to ensure a smooth transition and avoid costly mistakes.

How analytics makes wealth management unbiased?

Posted on October 28, 2019October 20, 2023 by Valuefy

Investment managers of today are out chasing the alpha. They are expected now, more than ever, to justify their management fees by giving a superior return on investment. This is especially the case when there are so many free and cheap passive investment avenues out there for investors to invest in. Only a market-beating return will satisfy customers of today and investors are looking at analytics aided improvements to achieve these performance improvements especially through the debiasing of investments.

Through advanced analytics, investment managers are able to rely less on instinct and more on data, thereby reducing the chances of making sub-optimal trading decisions. The ‘debiasing’ effect that analytics is playing can help bring about a lot of positive change, in the highly competitive and sometimes opaque industry.

Analytics increasingly becomes popular as wealth managers are recognizing the risk of relying purely on instinct for their decision making. It has come to the fore that human beings are incapable of being purely rational. Behavioral economics has proved that biases and irrational considerations based on our lived experience affect all of our decisions including those such as investments. Hence it is essential for us to rely on ‘Artificial intelligence’ that is sophisticated and data-driven as a way to counteract bias.

How does bias affect decision making?

In a study conducted by McKinsey, it was observed that traders were overcommitted to the positions they held and tended to hold on to them even when contrary evidence was presented. This was due to endowment effects and confirmation bias. The ‘endowment effect’ referred to the cases in which owners of a certain asset held on to it, despite any change in conditions and ‘confirmation bias’ refers to how our stereotypes lead us to discount beliefs that go contrary to our own.

How can Analytics help?

Using a digitized wealth management platform with Robo advisory and actionable analytics, that uses pure data to drive conclusions, can help temper the bias in investment management. Machine learning algorithms that learn from swathes of historical data and investment patterns help decision-makers get better and more scientific. The consistent biases and the emotions that made investment managers hold on to bad investments and stay away from certain industries due to ‘lived experiences’ could be neutralized by the power of Analytics and Robo/AI based investing.

What gives investment managers using analytics an edge?

When investment managers are using a digitized wealth management platform, they benefit from the huge data sets and patterns that the AI has been able to analyze over time. Big data is compiled about the investment performances and patterns of millions of users over millions of trades. This factors into the recommendations that the AI-driven Robo advisor makes.

It also factors in a number of variables such as the investment horizon, risk tolerance, preferred investment types and more to help arrive at the perfect investment strategy for you. Biases such as overconfidence, loss aversion, endowment effect are all erased as the AI relies purely on performance data collected from thousands of variables.

Looking ahead

Analytics will definitely impact the decision making of wealth managers for the better. This will help wealth managers make more profitable decisions for their clients and increase the value of their portfolios. A study conducted by Mckinsey revealed that debiasing using analytics helped fund managers gain potential improvements between 100 and 300 basis points.

Wealth management firms that leverage this cutting-edge technology will consistently outperform others in the market. They will create a lot of value for their investors and will fare much better than traditional firms without the analytics edge. It has become evident that only the firms that are willing to change with the times and adopt technology will capture the major share of the market, especially the tech-savvy and millennial one.

Looking to leverage analytics for your wealth management practice – Contact Us

Predictive analytics in wealth management The new normal

Posted on October 14, 2019January 2, 2024 by Valuefy

The wealth management landscape is ever-evolving and wealth management firms of today are increasingly adopting cutting edge technology to cater to tech-savvy millennials. The expectations and preferences of today’s clientele such as increased insights, automation, and 24X7 customer service can only be met by leveraging smart tech.

Investment managers of today are investing in wealth management platforms with AI-enabled advisory and predictive analytics to cater to these demands. The latest report by BCG on the wealth management landscape stated that 75% of wealth management firms are investing heavily in big data and analytics to meet evolving customer demands.

One of the major innovations in the space in the last decade is predictive analytics, which basically means the use of historical data to determine and predict the relationships between different variables in the wealth management process. Predictive analytics helps build models and processes that optimize the wealth management process, introduce high automation, and predict asset failure.

Predictive analytics is a space that is seeing huge growth in the market due to the value they provide to wealth managers in terms of cost savings and process efficiency. Using predictive analytics at different stages of the customer funnel is helping wealth management firms keep pace and deliver the coveted ‘high touch’ experience that clients have come to expect.

Here’s how predictive analytics is transforming the wealth management space:

Aligning business strategy

Predictive analytics helps wealth management firms anticipate investor demand, life events, attrition, investment patterns and more. This can help firms align their business and their product offerings according to this data to limit attrition and improve investor retention. It also helps firms understand investors with the highest risk of leaving and the highest lifetime value, so the managers can take appropriate action and effort to minimize the risk to AUM.

Data-driven intelligence

Robo advisory is being offered as part of the wealth management services which recommends portfolios for each financial goal by blending Robo capabilities with human intelligence. This automation helps in streamlining the process for wealth managers by eliminating redundant tasks.

Smarter client acquisition

Predictive analytics enables wealth management firms to customize their products and offer more targeted services to their clients. It enables them to recognize HNI clients and create custom investment opportunities for them. It also helps drive customized, personalized. and intelligent customer communications. From email communications, sales calls or message communications, analytics helps personalize them to offer a seamless experience leading to higher client acquisitions.

Exceptional customer service

Predictive analytics helps wealth managers give customers contextual advice. It helps wealth managers predict customer needs and approaches them with the right solution at the right time. Big data can be used to mine customer behavior through surveys, market patterns, risk levels and more to help provide tailored advice that customers appreciate. It also helps wealth managers make real-time recommendations, investment ideas, and financial plans in minutes, instead of hours.

Helps the research process

Predictive analytics and NLP can help asset managers make sense of vast unstructured and structured data sets. It can help managers understand patterns and trends in the data and make smarter decisions based on this research. This helps asset managers save on hours of time that they would have spent parsing through the data.

Higher visibility into operations and reduced costs

Digitized wealth management platform will help wealth management firms optimize processes and reduce back-office costs through better human capital management (optimizing hiring process), optimal demand management (optimizing effort based on customer lifetime value), and reduce due diligence costs through next-generation digitized KYC. These optimizations will help keep firms competitive and help the bottom line in this cut-throat market.

What does the future look like?

As wealth management platforms grow more and more sophisticated, the high investment in AI-based models means that they will become even more accurate. This means that investors can expect more personalized and better service from their advisors. Wealth management firms will be able to leverage these insights to create better opportunities and drive superior performance for investors. Firms that fail to leverage analytics will underperform and eventually will not be able to keep up with their tech-savvy competitors. However, those who do invest heavily in AI at this stage will capture a lion’s share of the millennial investor base.

Here’s Why you Need Hybrid Advisory for Investment Management

Posted on September 23, 2019December 8, 2023 by Valuefy

The introduction of Robo Advisory has received mixed reactions from wealth and investment managers.

While the tech-savvy managers have been quick to appreciate the value of this automated process, others assumed that this technology will make their jobs redundant in the future.

What is Hybrid Advisory?

Understanding the flow of money and making decisions based on the movement of the market comes with years of experience and in-depth research of assets, portfolios, and the market itself.

With the help of Robo Advisory, Investment Managers can recommend tailor-made portfolios for each financial goal, fasten the tedious task of onboarding customers, generate intelligent insights and rebalance portfolios with ease.

It adds an edge to advisory through intelligent portfolio insights, becoming an addition to the Investment Manager’s arsenal.

So, should Investment Managers be concerned about Robo Advisory?

On the contrary, they have reason to rejoice, because Robo-Advisory by itself is just a sophisticated product but partner it with an investment manager and what you have is Hybrid Advisory.

Here’s why:

It Improves Decision-Making

This is a collaborated approach to investment with the use of technology and human intelligence. The Robo advisors scan through terabytes of data to convert it into actionable insights.

It helps in leveraging big data to simplify the decision-making process in a cost-friendly way. The time which remained a constraint for investment managers is strategically handled by automating the operation procedures.

It Democratizes Investment Management

Wealth Management and Investment advisory have always been luxuries that only the affluent could afford. People who had amassed wealth over the course of their entire careers would go to wealth managers and investment managers for advice on where to invest their money.

Now, automated advisory for smaller amounts can take care of the clients that are in the primary stage and are still getting used to the market. Investment Managers can have potential clients in the pipeline long before they speak to them.

Valuefy is helping Investment Managers get on-demand, comprehensive analytics from historical and real-time data to make informed decisions generating better returns on the investments.

Valuefy is a FinTech company that enables Wealth Managers and Investment Managers with technological solutions to ensure the digitalization of their processes and empower them with comprehensive analytics, Portfolio Management solutions, reporting, and relationship management

Is Robo-Advisor a Good Investment Manager?

Posted on July 18, 2019November 7, 2023 by Valuefy

Are you thinking of integrating a robo advisory platform into your wealth management?

Maybe you have been considering a lot about it and want to know if it would be a worthy investment or maybe you have just heard about it and want to know more.

Well, in either of those cases, you have come to the right place.

Robo Advisors, without a doubt, do have a fair share of limitations which is why they are there to assist wealth managers and not replace them. Since a long-term investment plan needs proper planning, it is crucial that a financial advisor is in the equation rather than just a Robo Advisor.

Now, why am I starting with the limitations of the Robo Advisors?

Because I want you to understand that Robo Advisors, with all their benefits, still need you to make sense of the mechanical output that they generate. They still need a pair of human eyes to drive decisions from the data, not just to reduce risks but also to increase the returns of your customers.

With that said, here are a few advantages to integrating a Robo Advisory into your wealth management platform.

You could Onboard more People with Robo Advisors

Now, from a strictly business perspective, you need more clients to scale. However, not all those who can afford to invest are interested in third-party wealth management solutions. Robo Advisors, being more pocket-friendly could be an introduction of sorts to the uninitiated.

Rebalancing Portfolios is easier with Robo Advisors

Rebalancing is the realignment of weightings of a portfolio of assets and involves selling and buying of assets to maintain the desired risk. It can also improve returns. Robo Advisors could help wealth managers in rebalancing the portfolios. They can do it quickly which helps in doing it more often.

Robo Advisors help on Portfolios with Multiple Accounts

Handling investments on hand could be a tedious task and it’s better if it’s handled by a Robo Advisor, especially if there are a lot of accounts on the portfolio.

Robo Advisors are Time Savers

Since Robo advisors are essentially automated, it gives the wealth managers the convenience to focus more on other things like asset allocation, relationship management etc. This helps in making the most of the time available for each client.

With all the advantages stated, let’s go back to our initial question, Is Robo Advisor a good investment manager?

Well, It’s a judgement call.

Robo Advisors are good investment managers only when there’s a wealth manager involved. It’s more like a team where the Robo Advisor takes care of the time-consuming data-driven tasks and the wealth manager takes care of the decision making based on the comprehensive analytics of the data.

Valuefy’s Wealthfy has a Robo Advisory platform that’s helping wealth managers by providing end to end advisory with real-time intelligence. It is embedded with a robust portfolio data engine and is capable of handling multi-asset and multi-currency portfolios with ease. It also has adaptable and flexible white labeling that allows you to interweave it into your existing legacy systems.

With Wealthfy, your clients will experience a simplified user experience with intuitive dashboards and data visualizations that turn complex data into concise insights.

Know more about how Wealthfy will transform your wealth management firm, here.