• Fri. Dec 1st, 2023

The Continued Evolution of Wealth Management Services

Chad A. Schmookler, Senior Director, International Operations, InComm

Chad A. Schmookler, Senior Director, International Operations, InComm

The wealth management services (WMS) industry is booming. Advances in technology over the last 20 years like the maturation of the internet, the proliferation of smart devices, and the advancement of artificial intelligence (AI) have all had a huge hand in shaping the current environment. Moreover, highly publicized, and highly dramatized events like those observed during Reddit’s “wallstreetbets” meme stock phenomenon have delivered worldwide fame. And there appears to be no signs of a slowdown on the horizon.

So, what are the driving forces behind this flurry of activity? The answers are surprisingly simple – access, tools, and automation. Free and easy access to financial information and accounts, made possible by the web and mobile devices, have granted individuals unprecedented power to wealth plan like never before. As a result, financial institutions have had to continually deliver an onslaught of everadvancing web-based solutions. A key component of such deliverables includes a robust, omnichannel ecosystem that powers research and analysis, self-service, and automation.

The antiquated, resource intensive approach to WMS is no longer required to properly service most clients. With fully functioning platform delivery, most investors are now willing and able to completely control their financial futures. Platforms like Marcus, Chime, Robinhood, and M1 Finance were all designed to break the traditional WMS mold by appealing to young, less wealthy, mobile-savvy, and self-directed investors. Other platforms like Ally and Personal Capital have slowly expanded into their models. Ally started as an online bank offering checking and savings, but now offers auto loans and investment services too. Personal Capital uses a freemium model whereby a customer can connect every single account, regardless of platform, to obtain a full picture of their financial health. Additional services, including automated and personalized WMS are then offered at reasonable fees. No matter how you slice it, the wealth management model has radically changed.

” Personal Capital uses a freemium model whereby a customer can connect every single account, regardless of platform, to obtain a full picture of their financial health “

Perhaps the transitional tipping point was achieved upon delivery of automation services. Robo-advisors, like Betterment, act as an attractive hybrid approach to WMS. Taking advantage of AI technologies and low fee structures to intelligently invest an individual’s money, this option sits somewhere between selfservice and personalized oversight. Other automation-based offerings like Acorns allows customers to “set it and forget it” by rounding purchases to the nearest dollar within specified accounts. The rounded difference is then deposited into one of only a few fund options. An environmentally friendly fund is even available for selection which is particularly appealing to young investors. All this wealth management automation is underpinned by slick and engaging mobile apps which allow users to view their accounts at any time and from anywhere with just a few taps and swipes.

The WMS future is particularly bright as it is filled with so many opportunities. Continued growth and expansion will come through the largely untapped financial education segment. Existing products in this space, like Amex’s Bluebird, help to both educate young people about money and to control household finances. Likewise, yet unwritten success stories about WMS newcomers and industry mainstays will be had by striking the perfect balance between platform services directed at retail investors and personalized services aimed at wealthy, experienced clients. As customer needs continue to evolve, so too shall the products and platforms.

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