Wealth management – How it’s evolving

Because wealth management is continuously changing as an industry, we wanted to bring you three views from three completely different markets.

We spoke to our own Mark Chahwan from Sarwa (UAE market), Garvin Chen from Kapitalwise (US market) and Dann Bibas from Fountain Money (UK market). Trust us, there is so much they agree on!

Why is digital wealth management ripe for your area?

Mark: The UAE’s growth and job opportunities (and the nice weather) have attracted young professionals and families from all around the world. They are building their wealth but they don’t have access to a transparent and accessible platform that helps them invest easily and get better returns. We have ideal demographics for consumer digitization, with 40% of the population as Millennials and 94% as active Internet users. The banking and wealth managers ecosystem haven’t completely caught up yet. The DFSA regulator is participating in transforming financial services here: they granted us the first innovation testing license, specifically designed for Fintechs.

“They are building their wealth but they don’t have access to a transparent and accessible platform that helps them invest easily and get better returns.”

Garvin: There are 70 million millennials in the US and mobile is the primary channel they engage in. Banks in this day and age have not caught up to technology. If I wanted to invest and learn about wealth management at my bank, I wouldn’t know where to start. The way this current generation interacts is different from the previous generation. They want things on demand, automated, and everything done at the click of a button, similar to how they use their current applications.

Dann: Financial advice in the UK is too expensive and concentrated amongst a small number of professionals and savvy investors. UK regulators have coined this as the “advice gap” and we’re committed to closing it. By digitizing the advice process, and bringing it online, we can offer bespoke investment plans at a fraction of the cost of a traditional advisor.

What are some new trends or technologies that you are excited about in this space?

Mark: Many Fintechs in the region are solving for easier and faster sign-ups –  in our case, allowing our customers to invest fast and online, without the need to talk to a human (unless they want to). Another trend in the region is Blockchain technology, which is something that the government in the UAE is focusing on right now. This will potentially allow institutions to securely share customer identification data in the future, benefiting the customer with a better experience from fewer steps/documents to provide during onboarding.

Garvin: One trend we’re excited to see is being able to use machine learning and AI to analyze the customer’s financial profile, and tell the customer where to invest, and how much to invest. Another emerging trend is making investment really easy even for those who don’t have a lot of money right now. This is called micro investing. The act of investing in small but frequent amount. An example is buying a coffee and automatically investing the change.

“One trend we’re excited to see is being able to use machine learning and AI to analyze the customer’s financial profile.”

Dann: Open Banking will be rolled out in 2018 in the UK and enables consumers to share their data with various providers. In turn, those providers can suggest new products and services to help you securely manage your finances more efficiently. This is exciting – It can usher an unprecedented era of competition that leads to better experiences and transparency for consumers.

How will consumers benefit from you?

“By building an investment experience that revolves around people’s goals, we’re making investing more relatable.”

Mark: We’re making it really easy to invest in a personalized, diversified portfolio in line with anyone’s net worth or religious beliefs. Our customers benefit from the latest technologies in the market, such as artificial intelligence, for ease of sign-up with online facial recognition. Human advice is important in the region, so we’re launching 1-1 on-demand financial advisory meetings and a blog to educate our customers on everything related to investing and personal finance.

Garvin: KapitalWise partner with banks to provide them the same user experience their customers are used to with the apps they interact with every day. We analyze the user’s accounts, predict their future spending, and nudge or invest for them. Just like Netflix and Spotify recommend based on your data, we recommend based on your financial profile. We simplified investing and everything is a few clicks away.

Dann: By building an investment experience that revolves around people’s goals, we’re making investing more relatable by tying it to people’s preferences, circumstances, and lifestyle aspirations. All the perks of a friendly advisor made more affordable and on your smartphone.

What does wealth management look like in your area in 2025 to the everyday person?

Mark:  In 2025, investing will no longer be complicated and intimidating for the everyday person, and investors will understand more about the benefits of a diversified portfolio. It’s currently focused on real-estate and bonds. Technology will also empower people to take ownership of their financial life with the right knowledge and tools, both in everyday life (e.g. through daily recommendations and nudges) and longer-term planning (e.g. through intuitive data visualization)

“By 2025, we’ll be able to use machine learning and AI to not only automate our investments but to provide much more personalized investment advice.”

 Garvin: By 2025, we’ll be able to use machine learning and AI to not only automate our investments but to provide much more personalized investment advice. My investment profiles will also shift to fit me more as we age. Or if we incur a higher income, receive debts, the algorithm knows.

Dann: Wealth management will be less passive and focus on anticipating client needs. Imagine tools that suggest lower cost ETFs that suit your risk profile as they come onto the market. These “smart” features will become commonplace and consumers will welcome these changes with open arms.

Thank you, guys! 

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Important Disclosure: The information provided in this blog is for general informational purposes only. It should not be considered as a personalized investment advice as this might not be suitable for everyone. Each investor should do their due diligence before making any decision that may impact his/her financial situation and should have an investment strategy that reflects his risk profile and goals. All investing is subject to risk, including the possible loss of the money invested. Examples provided are for illustrative purposes. Past performance does not guarantee future results. Data shared from third parties is obtained from what are considered reliable sources however cannot be guaranteed.
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