Will Fintech change the traditional Wealth Management Industry?
Category: Technology
Will Fintech change the traditional Wealth Management Industry?

In the last couple of the weeks, the most important wirehouses in the country decided to end or pause their traditional recruiting strategy, and the multimillion dollar packages that came with it. Although it was a surprise to some, it has been well documented recently by industry experts that the landscape is changing and technology would take a large part of financial advisory business as millennials continuously become a larger part of the potential customers, the client-broker interaction is optional, and algorithms may make better investment decisions than a human.

It is accepted by all the industry players that personal investment advice will still have an important place in the high-net-worth and ultra-wealthy client section, but the mass of affluent clients or modest investors may one day have their financial needs met without the human interaction and a few mouse clicks.

Without a doubt robo-advisors are at the center stage of this transformation and will become an integral part of any diversify asset allocation strategy, similar to what fixed income, equities or mutual funds have been for more than a century. Sophisticated investors may still rely on the expert advice or that tailored structured portfolio, but the average investor would not justify the costs.

In the end, the soundest opinions are those that foresee a future towards a hybrid model on the asset allocation side with smaller commissions schedule, more transparency, sophisticated risk management tools, less face-to-face client-advisor interaction, and more automated customer service. Hopefully, all of this would create better returns for customer, a more stable income for advisers, and higher client satisfaction.

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