Wealth management in the years to come (1/2)

Investors nowadays are increasingly knowledgeable: they know what they want and also what they are afraid of. Advisors have understood that wealth management is not about investments but about the individual – and soon many customers will be Millennials.

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Wealth tech and digitisation

Robo-advisers are already a reality in finance: machines exist for automatic investment allocation, plus there is more effective use of artificial intelligence and machine learning on the market, according to an article on the website of the Wharton School of Business at the University of Pennsylvania.

Incumbent firms will acquire emerging, disruptive businesses. We don’t write cheques anymore to pay our bills; instead we pay online. The same development will take place in wealth management. Human advisers used to be evaluated by their records; with robo-advisers, it is all about the origin of algorithms and sources used for machine learning.

Predicting markets is, perhaps, not really so complicated; however, technology will enable us to change our investment goals as our lives change. Robo-advisers will anticipate these changes and ask us about them at the right time, while human advisers are often too busy to deal with such matters.

New customers

One of the new drivers of developments will be Millennials and their interest in a meaningful use of money. For this generation, how they spend their money is often about their personal values: they want their investments to be aligned with what they hold dear and consider worthwhile.

In this respect Millennials will differ from their parents, who currently form the primary target group of advisers. Millennials are aware of the efficiency of new ways of communication. They have no time for e-mails or three-hour meetings.

Many children who have grown up in families with enormous wealth have never learnt the joy of struggle. If rich parents do make their children genuinely work and struggle to accomplish something, this will be of huge benefit to the children in later life.

-jk-

Article source Knowledge@Wharton - the online business analysis journal of the Wharton School of the University of Pennsylvania
Read more articles from Knowledge@Wharton

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Wealth management in the years to come (1/2)

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Wealth management in the years to come (2/2)