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Can Digitisation Help Manage Your Wealth?

Money / Investing

Can Digitisation Help Manage Your Wealth?

New technologies are purportedly increasing investors’ options and efficiency in managing their own wealth, but how true is this? Privé Financial’s managing director – David Lee – weighs in.

Written by WEALTH Team on 28 March 2017

Robo-advisors often come to mind when people think about how technology is used in wealth management. But is that all there is to it? Not according to Privé Financial’s managing director, David Lee – who believes that digitisation can help investors in other ways.

“Investors often want something more than a one-size-fits-all solution, to the extent that they believe solutions should be personalised – regardless of the investment amount,” says Lee.

By meeting the demand for personalisation – which can be achieved through digitisation – Lee believes advisors are able to more efficiently service investors and add more value: “This is achieved by learning more about their clients through the use of technology.”

Collecting information on clients through digital means is more consistent, scalable and result-oriented, according to Lee. “Through this method, digitisation provides an advisor with more insight into how they can service their clients better,” he explains.

INCREASES ENGAGEMENT WITH ADVISOR

opportunities can be flagged and converted into revenue as well phone tablet technology

“Not only can digitisation provide more channels through which investors can engage with their advisors – it also reduces mistakes, oversight or inconsistency on the side of the advisor,” says Lee, adding that opportunities can be flagged and converted into revenue as well.

DEMOCRATISES WEALTH MANAGEMENT

digitised wealth management solutions are an efficient and economical way

Regulators are requiring more disclosure from wealth management firms in their bid to increase transparency within the industry, which increases firms’ burden to meet these requirements. “An unintended effect of this is increased costs for firms,” Lee points out.

“This means managing smaller accounts will likely become costlier and increase the risk of liability for broker dealers, advisors and others – which will challenge them to seek technology-enabled outsourced solutions to serve such smaller accounts,” says Lee.

Accordingly, Lee believes that digitised wealth management solutions are an efficient and economical way to serve small-balance account holders as well as the mass affluent to affluent investors.

ASSISTS ADVISORS

Digitisation makes it easier for an advisor to articulate portfolio information in a systematic and consistent way

As firms move toward fee-based advisory, Lee thinks adopting a digitised form of advisory will no longer be seen as just a service to small-balance account but also as a complement to the client–advisor relationship and a tool for client acquisition.

“Digitisation makes it easier for an advisor to articulate portfolio information in a systematic and consistent way – weighing and considering an investor’s risk profile, suitability and other preferences,” Lee explains.

This serves two purposes. “Firstly, it reduces product pushing and an inherent distrust of the advisor,” Lee says, adding that it also provides a clear way of creating value – which may not be available otherwise in a scalable and digitised manner. “For example, advisors can provide advice tailored to each client and their entire portfolio,” he points out.

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