How Fintech is shaping the future of Wealth Management

A new report from the World Economic Forum and Deloitte confirmed what many advisors, technology vendors and industry analysts have long insisted: it is established wealth management firms, not startups, best positioned to capitalize on disruptive technology.

Robo advisors have proven to be an effective tool for customer engagement, but they’ve also proven relatively inexpensive and easy to replicate. By offering their own robo, firms increase customer stickiness while also avoiding the high client acquisition costs that plague startups.

But the future is far from certain. Robos have set a new standard for the kind of personalized digital experience clients expect from financial services, and business-to-business fintechs—the so-called wealthtech companies—continue to automate more middle and back office workflows, forcing firms to find new ways to differentiate.

“Fintechs have changed the pace of innovation and reshaped customer expectations across the financial services ecosystem, laying the foundation for future disruption in the industry,” said Rob Galaski, co-author of the report and regional leader for financial services in the Americas at Deloitte Canada. “The success of fintechs in changing the basis of competition, as well as the increasing pace of technology, means that incumbents have the potential to improve rapidly—but also face rapid disruption going forward.”

The report details a number of new uncertainties that will shape the future of the wealth management industry. With robo advice becoming table stakes, how will firms differentiate their offerings? Will the trend toward low-cost investments continue, or will clients be willing to pay more for “guaranteed outcomes?” Will product manufacturing be characterized by more or less scale, and will manufacturers use robo technology to move upstream and disrupt distributors?

And how will all of these trends affect the role of human advisors? The WEF says the answers to these questions paint three diverging pictures of the future of the industry.

To read more, please click on the link below…

Source: How Fintech Is Shaping The Future Of Wealth Management – WealthManagement.com