The wealthtech revolution: how will it inspire change? 

PBI speaks to a wealthtech firm, and wealth life event data company on how the sector is demanding change. 

Platforms and solutions that leverage Big Data and Artificial Intelligence technologies give a genuine and frequently affordable alternative to traditional wealth management firms’ offerings. 

The companies leading the charge in reimagining the future of wealth management will be wealthtech companies that can scale services and products to the mass affluent while providing a secure, logical, and individualised experience. It is transforming the financial landscape by giving investors the tools they need to make wise investment choices and gain more control over their wealth. 

FusionIQ CEO Mark Healy discusses how his company is assisting in the transformation of the banking sector as well as what the future holds for wealth technology. 

Speaking to PBI, Healy explained: “The inspiration behind FusionIQ really started about five years ago, before COVID. Before the whole onslaught of digitisation, and the focus was most of the management team here from the wealth management industry traditionally we serviced RAS advisors and broker dealers, both domestically and globally our whole careers and we found that there wasn’t really a technology that brought together both self-directed trading or brokerage experience, alongside and advise the experience or a long-term goal type of investing experience. So, we built technology to bring those two together, and make it available to anyone who felt they needed to provide that to their investors. And historically, this never really was done before because there would always be a reason to separate the regular brokerage experience.

“We felt that if we could build a technology to do that, that not only could advisers or wealth managers help their clients do better investing and planning for their financial wellbeing. But also, individuals who are doing their own self-directed brokerage trading, can have access to an advice experience that that might complement what they are doing on their own. The thought was marrying the two of those together to really bring a very different comprehensive investing experience to the marketplace.” 

FusionIQ is a modern fintech business that gives you the ability to reach and serve investors online. The portal matches investors with unique portfolios and asset allocation models using risk assessment questions. 

The answer to competing in today’s technological environment and luring “next gen” clientele are digital investing platforms. 

“One of the main reasons folks come to us initially is they want to have a digital experience that they can provide to their clients and themselves. We focus mainly on credit unions and banks, we also serve as the Registered Investment Advisory community, to the RAA community. It’s a kind of a wide audience that we service, and each of those audiences has perspective needs, and reasons why they come to us to utilise our technology in managing wealth for their demographics. 

“There are different disparate platforms that different activities are performed upon. A firm could also be working with six to ten other inputs coming from different platforms. And that becomes very costly over time, it creates a lot of human costs and elements of that. Our technology is a digital technology that can replace those traditional platforms, whether it is for directed trading, digital advice, or turnkey asset management platform, and make it one experience. Digitising that and setting a wealth firm up for the future, where they can really scale their business is the second reason why organisations come to us,” defined Healy. 

“It is a really efficient way of making that step from analogue technology to digital technology. Most firms want to spend their time growing their client base and their assets under management, they are not really focused on building technology and doing these integrations. So, we provide a nice consultative way for them to make that transition.” 

Given the new generation of investors have better access to information, they seek not only more complicated and advanced products, but also more control over their investment portfolio. With the widespread adoption of new technologies, people are living faster lives, which has increased the desire for instant and remote solutions. 

Healy described how FusionIQ “digital technology creates the ability to kind of score and create a risk profile for an investor”. 

He added: “We have our own OMS. It is a very powerful way for an adviser to manage across multiple different types of strategies, multiple different types of investing, and goals. We provide a number of number of areas of value along the portfolio management front. 

“FusionIQ offers third party strategists and alternatives that are better, created and managed by other organisations, we allow them access to our digital marketplaces. They also have the ability for distribution to a much wider network of advisers and wealth managers that are on our platform that may not have had access to that type of product before. It is actually benefiting not only adviser and the end client, but also people who do create the strategies and investment models that they can now gain greater access to it through a digital connection to our ecosystem.” 

This shift in client needs has led to the introduction and development of wealthtech solutions. 

Traditional financial institutions are slowly making these adjustments to fulfil these demands. Wealthtech are better positioned owing to their updated digital products, modern data capabilities, and innovative models. 

‘‘We have really created a very different way of operating but keeping the same standards that are required out there, but making them much more flexible, much more easy to use, and really sort of exposing folks to different assets, investments in different types of products that they may not have gotten access to before, either as an adviser or actually as an end client, which I think is really important element of helping people in the investing world. Because a $5m account can get the same access to somebody with $5,000. Everyone wins in that in that scenario,’’ Healy pointed out. 

Wealth management start-ups that have successfully addressed industry issues like transparency and given customers more access to financial planning and investment options are primarily responsible for driving digitalisation. A number of factors, such as a fast-shifting clientele demographic, technological improvements, regulatory reforms, and heightened competition, are responsible for the transition. 

Beyond that, Robert Kirke, founder and CEO of InterGen Data, a life event prediction and analysis company, spoke with Private Banker International about its discoveries. 

InterGen Data supply data to banks, financial service organisations, and insurance companies in order to empower and assist advisors and agents in identifying client gaps, uncovering hidden risks, and recognising opportunities inside every advice, portfolio, and financial planning. 

Data insights are some of the ways it changes how people invest and manage their wealth. 

Kirke explains how: ‘‘InterGen Data is a life event prediction and analysis company, and we help advisers, or people who provide advice, understand, and find hidden gaps. Within coverage, we help them locate risks. We help them uncover revenue opportunities that exist within their current clients today, by using life events, and those life events that we predict what’s likely to happen, when they are likely when those events are likely to occur, and then how much they would impact them on their financial journey. Today, we are one of the one of the only firms that actually go out and predict health and wealth life events, we predict in two main categories being health and wealth life event, but specifically, they are there to help you understand what’s likely to happen to your clients, and then how you can address them.’’ 

Wealthtech is transforming the world of investing by enabling investors to make wise investment choices and exert more control over their wealth. 

‘‘Our first expansion is really to drive into the insurance market and expand from there. As we start to really build those models, the actuaries who work for the insurance companies really understand the nitty gritty of our data. So, from pricing models all the way down to just simple next best offer types of scenarios. The second piece is going to be the expansion of helping the middle class. Most banks and financial services want to deal with the people with the most amount of money, the top 20%. But it’s that whole middle class, it’s everything about the bulk of the people were these products and services that we’re going to offer that they offer that we’re going to be able to bring down to that next level,’’ Kirke reported. 

Insurance solutions are quickly becoming an essential component of complete financial planning and asset management methods. It can help to make a financial plan more predictable and secure.

Another advantage of insurance is that it can bring predictability to the individual’s legacy and estate strategy. The value of investments, real estate, business interests, and other financial assets can fluctuate over time. By doing so, InterGen Data can forecast 95 different life events using AI/ML-based algorithms and non-PII data features.

‘‘InterGen Data stands for intergenerational data. So, when we take this data, we are looking at not only helping this generation for the future generations, but we are also looking in working with several partners, some in the UK, Singapore, Canada, and in the US. Our plan for expansion is going to be from an industry perspective, probably more healthcare focused, and then also insurance, which kind of leads into that, as well as wealth management, which is that transference. On the flip side, we’d probably say the UK and Singapore, and Canada are top targets, one because of the amount of data that we can get there, and to because we’ve already established relationships with firms that are that are starting to help us grow,’’ said Kirke.

Wealth technology is still in its beginning stages, and there will be tremendous trends and shifts that will reshape the wealth management business. However, one of the current key challenges in wealth management, according to Healy is mergers and acquisitions.

He mentioned: ‘‘There has been so many mergers and acquisitions that’s gone on where firms have acquired so many different organisations. And the big companies are now facing the same issue that the original reason why those firms sold their businesses was, they are being forced to do things in a certain way. So, the advisers are back to being somewhat pressured into using certain products and certain practices. I think independence is the other main challenge for wealth managers, to go out and really have an independent practice where you have your own flexibility.’’

Additionally, given all of the data that InterGen Data works with, one of the trends and developments that Kirke expects to see in wealthtech is regulation. This is because technology can increase efficiency, improve the digital experience, and dramatically reduce individual costs.

The wealthtech sector needs to be ready to fulfil the complex and ever-evolving needs of investors as well as their quest for a better user experience. 

‘‘The ability for marketing to increase tremendously using technology is huge. That’s a big trend right now, I’d probably say it’s the largest, but it’s still at its infancy stage. That’s where people are starting to get involved,’’ said Kirke. 

‘‘The overall theme is that in order to provide the right services to the individuals, you have to incorporate accumulation models, and decumulation. Models and protection models. What I mean by that is, when you are in your 20s, you’re trying to save and invest. When you are in your 50s, you are trying to protect your money and preserve your money. When you are in your 60s and 70s, you are trying to spend your money wisely to keep it lasting for as long as you live. Wealthtech, insurer tech, and health will come together, because they are all fighting for the same dollar from the individual. Each of these things are going to have to adjust.’’ 

Equally, the opportunity for wealthtech companies will continue to span a broad range, starting with the automation of traditional wealth management and moving all the way up to the reform of wealth services for the average customer or new types of private banking. 

In the financial services industry, digital marketing for wealth management companies is rising in popularity as a strategic and cost-effective tactic. It’s critical to take into account incorporating digital marketing tactics for wealth management into their plans as wealth management marketers come up with concepts. Their outreach programmes can profit greatly from doing this. 

Healy stated: ‘‘We did a rebrand recently, and we started to focus more now on marketing. Social media has really continued to grow in the wealth management world and to be out there and be present in that channel is important for us now. We sponsor a lot of thought leadership type sessions, so not like gigantic conference type attendees. It is more of an intimate setting with leaders of credit unions. Users of banks, leaders of our IA firms, and really act as sort of an advisory group mentality, going through what the issues were sort of talking about are for them, and how they can embedded themselves, either through technology or different workflows and practices.’’ 

‘‘We’ve just recently reignited our efforts in the Canadian market. So, you will start to see us up there in a pretty big way. We have clients in Europe, in Thailand, Latin American clients, we have clients around the globe. But we are going to start to have a greater focus in Latin America, there seems to be a very growing demand for digital technology.’’ 

The future of wealthtech is transforming how we think about finance. Technology advancements have made financial services more affordable, effective, and accessible than ever before.

By fusing modern technology with a digital first experience, companies have created new models that integrate wealth management into everyday life and empower the typical layperson that traditional wealth management had excluded.

Nonetheless, the benefits of wealthtech are clear, but there are several problems that need to be solved. The creation of a regulatory framework requires cooperation between financial institutions and regulators.

Wealthtech companies and those who support them appear to have a larger demand for new services and solutions that are digitally led and highly individualised. As it develops, it has the ability to alter how we view investment and finance, making them more inclusive and available to everyone.