Advancing the Robo-Advisory Proposition for all Clients: Wealthy and Non-Wealthy

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By FINTECH Books Contributor, Eric Thuillier
Follow: @ThuillierEric 

The first wave of digital wealth management that we have experienced in the past few years has made accessible to an increasing number of mass-affluents a form of wealth management.

Although relying most of the time on relatively old asset allocation methodologies and a limited type of products, namely ETFs, there are clear benefits brought forward by having extended the range of clients.

Indeed the increased affordability, transparency, user experience, and a digital interface are now benefits that most clients are looking for, including most HNWI (2 thirds of them are considering automated advice solutions as per the 2016 Cap Gemini World Wealth Report).

However this first wave is simply akin to taylorism and the creation of a standardized offering for a mass market.  In the past many people having financial goals did not know how to pick and assemble by themselves the parts (financial products) and could not even buy a basic car (a basic portfolio). Now everybody is able to buy a simple standard car (portfolio), but that does not mean everybody wants to buy that car.

The toughest challenge for digital wealth management is now to extend and customize much more the offering in order to satisfy fully the needs of all client segments, making accessible more sophisticated products and methodologies and having each client find its ideal digital wealth manager.

There are some features still not that prevalent and needed for all portfolios, such as airbags (aka improved drawdown control). Some clients will want powerful engines (streamlined hedge fund likes components), others fancy colours, or an entirely unique tuned portfolio.