The Evolution of Wealth Management

A $10 trillion generational wealth transfer is predicted for 2025, and it will change the wealth management industry as a whole. Not only is wealth shifting, but expectations around the wealth management experience are changing, too. Younger investors want tech-enabled experiences, and they expect responsiveness from advisors. Wealth managers need to understand their clients’ expectations and how to respond to them. Digitalization is critical.

The History of Wealth Management

While you could make the case that wealth management emerged when monarchies ran countries, wealth management is a relatively new concept that developed within the last 100 years. In the U.S., the stock market crash of 1929 and the Great Depression resulted in greater financial regulations to ensure security, prevent fraud, and protect individuals. Perhaps the most significant act pertinent to wealth management was the Advisers Act of 1940, which led to the regulation of investment advisors who manage $100 million or more in assets. Under this act, the roles of investment advisors, money managers, and investment consultants emerged.

The 1980s witnessed a boom in stock markets and investment management. When the market crashed in 1987, investors panicked. And, in 2000, due to the dot-com bubble, another financial surge came through. Asset managers reached for wealthier clients, leading to the emergence of private banks. Financial institutions consolidated and independent investors emerged. They were able to distinguish themselves by abiding by the rules of their statuses as fiduciaries.

How Tech Transformed Wealth Management 

Between online trading platforms, robo-advisors, and Google, access to financial services is widely available. The role of investment advisors, RIAs, and wealth managers in this shift is critical to serve as a guide and a trustworthy resource of vetted, data-driven information with speed, accuracy, and attentiveness to win and maintain clients.

Wealth Management Platforms: Improving the Client Experience

How can RIAs and wealth managers deliver meaningful results for clients, build stronger relationships, and improve their own day-to-day operations? Digitalization solves challenges such as lag time, manual paperwork, lengthy approval processes, and so on. Leveraging digital platforms allows clients to monitor their investments, make transactions, and communicate with advisors anytime and anywhere. AI and machine learning can analyze massive amounts of financial data, leading to more accurate predictions and modeling. Robo-advisors can offer algorithm-driven investment strategies that are cost-effective and customized to individual risk preferences, reducing the administrative burden on the wealth manager. 

The Business Case for Digitalization in Wealth Management

Consumers want instant access to their portfolios, real-time answers to timely questions, performance metrics, and more. Qdeck’s cloud-based fintech platform leverages state-of-the-art quantitative financial technology to analyze diverse market data feeds and alternative investment databases. QadvisorGPT provides real-time data across thousands of assets and alternative investments with hyper-relevant information.

Robo-Advisors Quickly Target Clients’ Goals

  • Robo-advisors can be available to clients anytime and give them the immediate advising experience they desire.
  • Wealth managers can build from Qdeck’s model library to filter investment information and adjust for investing style using established schematics for a variety of client types.
  • With Qdeck, advisors can select an allocation scheme from a variety of options, including fixed weights, expected tail loss optimization, and machine-learning methods.

Cater to Multigenerational Clientele: Preparing for a Shift of Wealth

Boomer investors will shift their wealth to younger generations soon. These younger clients are already doing business with the most innovative technology companies in other areas of life, and doing business with their financial advisors should feel the same.

Cybersecurity is a concern in any industry, but financial advisors carry a greater burden due to the sensitivity of the information they handle. Financial advisors must choose technology that prevents security breaches that may affect clients.

Preparing For the Future of Wealth Management

To prepare for the expected $10 trillion wealth transfer in 2025 and an estimated $60 trillion in 2040, advisors should take advantage of AI and automation. To capitalize on the market of younger, tech-driven investors, advisors should consider user-friendly and far more cost-efficient technologies.

Understand the Pulse of The Investing Market: Keep Up With the News

Investment decisions are impacted by news and economic trends. With QadvisorGPT, wealth managers can take the pulse of the investment market by understanding—at a glance—the latest news through our AI-powered news graph. Our centralized, cloud-based platform offers robo-advisor services, helps with client relationship management, uses quantitative models and data, and more.

Want to learn more about Qdeck? Schedule a demo today.