Digital Wealth Management - The New Age FinTech

May 26, 2022

Areej M Alturki
Founder, Nakla

Digital wealth management has expanded to embrace far more than it is now. Companies that fail to create a substantial platform risk losing the fight for consumer market share and leading industry talent. In this article, we highlight the wealth management industry's benefits and discuss the top players in the market.

What is digital wealth management?

Digital wealth management is defined as the digital technologies used by financial experts to create exceptional client experiences across every device. These solutions promote improved involvement and visibility, facilitate cooperation, and contribute to the improvement of capital asset efficiency. The automation of the financial industry enables corporations to exchange data-driven information with advisers, increasing engagement and strengthening partnerships.

Wealth management businesses encounter a shared set of obstacles in their efforts to harness digital technologies to connect with customers, many of which are linked to data collecting. Most businesses' customer contacts are defined by many frequently fragmented data spread over an entire company.

A scarcity of third-party information makes it challenging to offer tailored analytics and appropriate services. Connecting businesses with automated marketing resources allow them to gain data-driven information and participate in cross-channel strategic messaging.

Even if an organization takes the digital wealth management platform, the adoption rate is minimal. This is frequently due to advisors' reluctance to exploit information across platforms, and the tools may be difficult to use.

Insufficient support staff training may leave the team unprepared to manage queries resulting from data-driven initiatives. To achieve effective digitalization, it is also critical to have adequate support and assistance in place within a business.

What are the advantages of a digital platform for wealth management?

The advent of technology has encouraged people to make reliable investment decisions without any professional financial advisor's assistance. People in the modern corporate environment may now easily protect their long-term future by spending without worrying about dangers. All thanks to digital wealth management platform. Let's check out some essential benefits you get from digital wealth management.

Get Rid of Brick-and-Mortar Financial Managers

The current digital business aspect has reduced the need to attend brick-and-mortar organizations for financial guidance – for a price. Though some investors prefer meeting up with advisors face-to-face, it does not guarantee safe investment. With a smooth shift toward digital platforms, physical meet-ups are getting abolished. And, as a result, modern wave of digital wealth management is ushering in.

Financial advisors are now available just at a click of a button and have become easier to access. With the introduction of AI technology, the long-desired financial guidance is now at your fingertips.

Higher Investment Returns

Tracking equities is a breeze because traders have easier access to the market due to Saudi Arabia's digital wealth management tools. It suggests that traders may now make well-informed selections about which equities to invest in, resulting in increased profits. With the Saudi Arabia-based Nakla platform, investors can maintain close tabs on shifting stock values and make tangible investing decisions.

Enhance Client's Engagement Via Automation

The digital transition of the wealth management has led to enhanced digital experiences that keep the customers engaged on their terms. Though digitization will not replace the advisor customer relationship, automated investing provides investors with a custom approach to meet their financial needs in real-time.

Security in Record Keeping

Manual logbook via casual paperwork is gradually taking a back seat, giving way to an age of digital logbook. Thanks to digital wealth management platforms, record-keeping has become a hassle-free process. With the introduction of cloud storage technology, it has become safer and easier to preserve digital financial records. 

The most significant concern for most traders nowadays is having their papers lost or damaged. This causes them to get disoriented, transfixed, and hinders their investing development.

Top 13 Digital Wealth Management Platforms

1) Nakla

Nakla is a well-known financial service and digital financial technology investment platform. The company is a great believers in the necessity of wealth management and developing a better strategy for future financial needs. As a result, they created a platform through which you could obtain an automatic investing solution based on mathematical algorithms.

2) Betterment

Betterment, which has over $4.8 billion in assets under management, provides services like retirement planning, tax-loss harvest and more. According to the firm, its investors should anticipate 4.3 percent better returns than the average DIY trader.

The marketplace has a flexible fee structure. The traders with accounts of less than $10,000 need to pay a fee of 0.35% if they are using automated deposits to make the payment. Investors above $10,000 must pay 0.25% every year until their portfolio reaches $100,000, wherein they are charged 0.15%.

3) Kuvera

Kuvera is a Robo-advising platform that assists investors in investing in financial instruments like mutual funds via a 'gamified' smartphone.

Kuvera does not collect any processing fees from clients who invest money via the online network or mobile application. The business manages resources under the advisory of INR 7K Cr in mutual funds with over 500K clients.

The startup also offers custom investment advice depending on the user's requirements. Users can move from regular mutual funds to direct mutual funds, cutting their investing costs. According to the firm, around 35% of its consumers are first-time traders.

4) Sqrrl

Founded in the year 2017, Sqrrl is one of the most popular wealth management platforms aiming mainly at mutual funds. Sqrrl has solidified its market dominance by focusing on younger generations of GenZ and millennials. It helps investors to preserve their funds automatically from as low as US$ 1.38 or any time they invest. The firm also enables users to protect their money for specified goals. 

Moreover, Sqrrl assists investors in analyzing multiple investment options such as one-time investment plans, SIPs, and tax-saving investment schemes.

5) Zerodha

Zerodha, one of the foremost brokers in India, boasts of being the nation's most prominent stockbroker. With over 5 million clients, Zerodha deals in an extensive range of products. This accounts for more than 15% of all retail order volumes in India. The platform helps users invest in options, currency derivatives futures, IPOs, and mutual funds and bonds.

In the event of interday trading, the company permits users to trade for free. For intraday trading in equities, Tt imposes a minimal 0.03 percent of the deal or US$0.27, whatever is less. It's worth noting that the firm, which has achieved profit, has been bootstrapped from its beginning. In comparison to an earlier year, the company's sales increased 11 percent to more than US$127 million in FY2020.

6) Hedgeable

The startup, established in 2009, automates complex investing for business owners in less than five minutes with no minimum investment necessary. It makes ultra-high-value wealth management services available to the general public.

It has created several unique technologies to provide services such as risk management, hedging, cryptocurrency investment, impact investing, and private equity. There is no minimum contribution required to gain membership to the Hedgeable network.

7) Wealthify

Established in the year 2014, Wealthify is a popular wealth fund situated in Cardiff. This platform boasts more than 30,000 consumers and has expanded its services since its launch. Since its inception, it has extended its portfolio of services. It includes general investment accounts comprising ethical investments, self-invested personal pensions, Stocks and Shares ISAs, and more. 

The platform imposes a minimal annual fee of 0.6% for handling your investments. Though with many investments, several add-on charges imply, the company focuses on keeping them as low as possible.

8) Refinitive

Refinitive is one of the most popular financial market information and infrastructure providers. With more than 40,000 clients, the platform equips participants across the worldwide financial marketplace. They deliver information, analytics, and a platform that allows clients to confidently implement crucial buying, selling, and risk decisions.

By merging an exceptional open marketplace platform with top-rated information and expertise, they link people to options and opportunities. This drives ability, creativity, and development for the clients and stakeholders.

The platform employ cleaner, and more readily available information to guide the application of emerging technologies like AI and machine learning. It allows the clients to get better insight, drive more rapid innovation, and effectively traverse this unprecedented period of transition.

9) Schwab Intelligent Portfolios

Schwab creates a tailored account based on the responses to questions about an investor's objectives, timeframe, and risk tolerance. Investors can change the distribution in Schwab's suggested model up to three ETFs, which Schwab will swap with an option. For instance, if you don't like the oversea ETF you picked for your investment, Schwab's tool allows you to replace it with some other from the list.

There is no cap on the number of Intelligent Portfolios profiles you may have, each with its own aim and approach.

10) Robinhood

Robinhood gains a ranking point owing to several excellent practices on Twitter. On the platform, the mobile-based brokerage effectively blends customer service with marketing objectives. It introduced its @AskRobinhood channel at the same time as the brand itself. @AskRobinhood has tweeted 28,300 times since then. 

Robinhood has enhanced its customer assistance experience by publishing helpful GIFs with step-by-step click pathways for frequently encountered issues.

Moreover, in 2021, Robinhood launched a 24/7 call-back option, allowing customers to request to talk with a person. The in-app expertise assures a call-back within 30 minutes after making the offer. You may also contact the firm via email. 

Over 800 articles on various financial subjects are available on Robinhood Learn, the broker's online tutorial. Mailing lists, a podcast, and an in-app learning module are among the other options.

11) Groww

Groww's phone applications and online platform promise to make first-time financial investment seamless and more efficient. 

Groww Assist aims to educate consumers about the numerous risks associated with each portfolio. Also, they provide clients with an impartial appraisal of all mutual funds accessible on the marketplace. SmartSave is the firm's financial instrument that looks like a bank account and allows clients to withdraw their savings.

The platform charges no fee for trading in direct mutual fund plans. However, the company intends to monetize the next set of goods that will be available on the marketplace soon. The firm stated that it intends to expand into many products, beginning with stock investment, which was offered on the site. Groww currently does not charge a transaction fee when purchasing stocks.

12) Acorns

Acorns is a one-of-a-kind Robo-investment application that builds a portfolio out of your spare coins. You are free to attach as many debit or credit cards as you choose. Then, Acorns adjusts up to a single dollar for each transaction you make and spends the difference in ETFs and bonds.

For accounts of $5,000 or more, the cost is $1 per month or 0.25 percent per year. Acorns will not make you rich overnight. However, if you are a beginner investor who finds investing intimidating and costly, this might be an excellent way to dip your toe into the ETF waters.

13) Scalable Capital

Started in 2016 in Munich, Germany, Scalable Capital has turned out to be one of the quickest growing digital wealth managers. The firm has invested more than £1.3 billion of assets for more than 50,000 customers. It offers the consistently best returns on low to moderate risk portfolios. However, it is unlikely to be a star performer owing to its emphasis on risk control.

Conclusion

The worldwide usage of digital channels is propelling the growth of wealth technology. Wealth Tech is a category primed for extraordinary growth. It is driven mainly through stocks, which account for 70% of the industry, and mutual funds, which account for 30%. Because of the increased acceptance of digital channels, the Wealth Tech sector are surely going to explode in the coming years.

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