Empowering Asset Owners and the Buy Side

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By FINTECH Books Contributor, Efi Pylarinou
Follow: @efipm 

WealthTech is an unstoppable tech-enabled trend disrupting these relationships.The Sell Side (broker dealers, market-makers of all sorts of financial instruments) has been the service provider in the driver’s seat, in the power position, serving their Buy Side clients (asset managers, mutual funds, pension funds, hedge funds). The same relationship holds between the Buy Side, acting as the service provider to Individual Asset Owners.

Starting from the top, The Buy Side was (partly or wholly) captive to the Sell Side, in all the phases of the trading life cycle. We are now entering the era of the Sell Side offering freemuim services to their Buy Side clients and redesigning the Sell Side business model to accommodate this shift. (The case of Goldman Sachs) we are witnessing early signs of the Sell Side empowering its Buy Side clients.

At the same time. Empowering both types of clients with tools that lower costs, offer transparency, enable the faster, better discovery of opportunities, and are customized or contextualized. The next phase will be integration of these scattered tools onto a digital wealth management platform. (Multiple examples of Fintech ventures) we are witnessing diverse and multiple signs of Fintechs empowering Asset Owners and the Buy Side.

The last and nascent part of this empowerment trend is the tech-enabled creation of wealth from Personal Digital Assets (coined PDAs for simplicity). Each individual is the creator and owner of several digital assets that are typically mismanaged or in many cases, exploited by tech firms without any revenue sharing. These range from one’s credit score, to one’s digital ID, all the way to new digital assets than can be created from the ever-increasing amount of personal data.

We are witnessing the nascent signs of Fintechs empowering individuals to manage and create wealth from their Personal Digital Assets (PDAs).