Digital Wealth Advisors Are Transforming Wealth Management

Sometimes it feels like technology is already in every corner of our lives-- from ordering food to calling a taxi. It was inevitable that entrepreneurs, developers, and wealth managers alike would recognise that wealth management would be also be transformed in this era.

No longer is your traditional advisor who dresses in a suit, serves you fancy tea, and gives you the best advice he can, the only one who can provide you the information and guidance you need to reach your personal financial goals. Digital wealth advisors, commonly known as digital wealth advisors, are quickly gaining traction in the investment space. In fact, the banks for which these traditional advisors are working are even adopting hybrid digital wealth advisors to help their wealth managers improve their advice. Digital wealth advisors are becoming so prolific, relevant, and trusted that McKinsey & Co. recently reported that digital wealth advisors globally may be managing up to $13.5 trillion USD worth of assets by 2020.

Digital wealth advisors are not just a substitute for wealth managers; they are also redefining how individuals can manage and grow their wealth. Technology has enabled traditional market analysis to incorporate more real-time variables. Such efficiency can optimise hundreds or even thousands of portfolios within seconds, improving results that humans cannot physically accomplish.

Facing growing demand for more efficient interactions, more convenience with mobile technology, expectation of lower costs with automation, and comfort with technology intertwined throughout every corner of their lives, digital wealth advisors address today’s consumers’ needs. And already, the customer experience with digital wealth advisors far outperforms that with traditional advisors because customers can now achieve their financial goals on their terms: with significantly increased accessibility, flexibility, and security at a low cost.

Digital and accessible

Traditional wealth management has barely evolved in centuries, but now with technology, digital platforms offer access to customers who once didn’t have access to financial advisors. Technology has no boundaries; anyone with access to a digital device can now sign up.

Flexible experience

Gone are the days of having to make an appointment with an advisor at an inconvenient time in the middle of the day. With digital wealth advisors, users can access their accounts and see all of the information on any digital device, and at any time of day-- or night. And it gets better. Not only can they see all information and detail on the digital platform, they can also  make adjustments to their monthly deposits, play around with estimation tools to find out “how more money can I earn if I start investing $100 SGD more a month over the next 10 years?,” or even withdraw money, if they so choose.

Safe

Throughout the history of financial market disruptions, a large percentage of devastating financial incidents has occurred due to human error. Well-conceived and stress-tested technological systems can now minimise the occurrence of these avoidable, low-level errors that can cost banks and individuals thousands to millions of dollars.

Low-cost

Digital wealth advisors are largely able to charge lower costs for these improved features and experience due to the efficiencies the technology creates; digital wealth management platforms finally provide direct access to the markets, and the technology creates more efficiencies that result in significant operational cost savings. It turns out that not involving technology to manage investments may turn out to be even more costly than the alternative. A traditional advisor would charge more, resulting in the return on the investment plan being up to a third lower than if you were to invest money with a digital wealth advisor.

Low, or sometimes even zero, investment minimums also mean that more people can now afford to invest their money, which is another reason why these investment platforms will soon be the new standard investment tool.

The new standard

These key differences in the overall customer experience in investing is a large reason why people of all net worths are leaving their traditional financial advisors behind for digital wealth advisors. The overall improved user experience through easy-to-use digital interfaces makes the investment process better than ever before. The opportunity to incorporate artificial intelligence and machine learning means that over time, digital platforms can provide financial advice and personalise it based on numerous personal factors to help the customer reach his or her target.