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DIGITAL WEALTH MANAGEMENT Digital dynamics
Devie Mohan, co-founder and CEO of FinTech research company, Burnmark, asks: what does the future of digital wealth management look like?
The democratisation of investments
Digital wealth management firms propose that best- in-class ideas, managers and investments should be accessible to all investors and not just to the financially elite. Through automated algorithm-based advice these innovators undo trading obstacles for investors, while lowering the bar for entrance. The democratisation of investment advice promises to embrace the underserved segment effectively.
The continued growth of ETFs
trends and market dynamics of the fast growing digital wealth and robo-advisory space. We looked at over 230 startups launched in the last five years or so, most of them robo-advisers, to understand how the industry is seeing consolidation, partnerships and growth in the wealth management space.
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We identified digital transformation as happening due to five key drivers in the market and consumer demographics. The incumbents have been quick to join the party by launching digital advisory services through in-house offerings, acquisitions and partnerships. As one of the spaces within FinTech that are working extremely closely with incumbents, the dynamics are unique.
www.ibsintelligence.com © IBS Intelligence 2017 urnmark recently published a report on the
Many investors have realised that adopting a lower cost, passive approach to their personal investing through ETFs (Exchange Traded Funds) is a more prudent strategy than the active approach that has dominated the industry for decades. In the US, these factors have spurred continued expansive growth in the popularity of ETFs since their introduction in 1993. The European industry is a hybrid. Western European countries are as sophisticated as the US market, but retail adoption is lower. In comparison, ETFs in developing markets are in their infancy and the Asia Pacific market is expected to grow at 20-30% annually.
Transparency and control
Clients increasingly want to know how their money is being invested and the services for which they are paying fees. Clients’ preferences for investment decisions are also evolving. While European clients still prefer to delegate their wealth management needs to a traditional
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