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Four top uses of technology in wealth management

Technology has long been part of the business of wealth management, but its role was historically focused on supporting internal needs of wealth management firms in areas such as portfolio accounting and management. Very rarely did the technology used go further and positively touch the client.

However, we are witnessing an evolution in the application, flexibility and deployment of technology in the wealth management industry. Much of the technology used in the past was clunky and really only suitable for internal use, but we now see relevant, modernised technologies right through the business from front to back. Good for the business, the adviser and, thankfully, for the client too.

While much of the news on the client side might focus on fashionable topics such as robo-advice, many of the relevant themes also support the wider development and application of technology throughout the business. We use the term Built for Wealth, which highlights technologies built with a focus on the needs of this sector and there has been a significant uptick in solutions built for wealth management.

From the client’s perspective, multiple technology developments are changing what wealth management is, who delivers it, how it is delivered, who it is offered to and what is included. This ongoing change looks set to deliver a wealth management offering that will be better for both the traditional wealthy client base as well as increasingly enabling a wealth-management-for-all model.

We see technology, depending on the requirement for any individual wealth manager, helping the wheel spin smoother, faster, straighter, longer and more efficiently.

Let’s provide four clear examples:

Relationship and communication

What type of relationship does a client want? Adviser led, technology led or a mix, to be determined as and when the client requires it? Previously, there was little or no choice. Technology now allows the client immediate and deeper access to their portfolios, and multiple means to engage their wealth manager when and where they want and whether by chat, secure email, video or browser. This growing flexibility represents a sea change for the industry and the client.

Aggregation and reporting

Achieving a full view of net wealth across banking, investments, debts, pensions and more has always been hard. This is changing. Through regulation, technology tools and client demand, accessing a full view is becoming increasingly possible across multiple providers. Having access to this view, in one place, is a significant step forward in the concept of wealth management.

Behaviour and customisation

What exactly does a client need and want? Historically, this understanding was delivered by the adviser. That was how customisation was delivered. Technology is now changing this to deliver an increased understanding of client behaviour and, closely linked, the potential to then offer a customised service, product and pricing to an individualised profile.

Products and investment ideas

All the above also maps well to the new capability of wealth management to offer a broader range of products to its client base that, with a greater understanding of a client’s preferences, can also facilitate the delivery of improved investment ideas to relevant clients. Whether exchange-traded funds, alternatives, off-market deals or more, technology is improving access, process, cost and personalisation.

To conclude, from the client perspective, the new era of modern technology is bringing a better wealth management experience, more client centric, more transparent, more cost effective, more personalised and generally easier for a broader client base to access. The evolution remains early in its journey, but the building blocks of change and industry improvement, which are good for all participants, are increasingly available and being put in place.