The Digital Wealth Forum

Tuesday 2 October 2018

It is an unprecedented time for financial services. Technology and digital disruption have swept over the wealth management, savings and investing as well as pension markets in recent years with a fleet of robo advisers and app-based firms now offering services once reserved only for wealthy clients.

Robo advice firms continue to grow rapidly in an an ever more crowded space with many new start-ups launching in the past year. Incumbents are also investing heavily in their own digital offerings. Business models are starting to show real differentiation

Some of the key themes at AltFi’s second Digital Wealth Forum

  • Financial Inclusion

  • The re-bundling of financial services

  • Hybrid models: The Human touch vs pure robo

  • AI & Machine learning in wealthtech

  • Retirment and Pensions via robo advice

  • Back office/KYC/Enterprise

  • Privacy/cybersecurity and data breaches


What young people want from their money

Iona explains how millenials are conflicted in achieving their financial goals. The reason for this is because of digital overload, the previous generation being able to get on the housing ladder early and having high expectations when it comes to salaries.

She mentions millenials have the stereotype of being careless with money when actually 2.8mn of them have an ISA account.

"A third of young people have a "side hussle" in an attempt to become an entrepeneur"

She brings up a statistic from Neybor's recent survey that the most of its young employees only "get debt to see them through to the end of the month"

Building a next generation wealth manager

Ian explains that the purpose of the platform, Tiller, was to be a fusion of technology and asset management.

Spotting the gaps by banks, insurers and wealth managers, Tiller wanted to resolve these issues by offering an all-round platform.

Whilst Jonathon performs a live registration to the platform, he demonstrates the simplicity of the process by completing his preferences and the verification of his ID and documents all within 10 minutes. 

Jonanthon shares Tiller's future plans including real income products, offshore platforms including Asia and SIPPs.

Removing the barriers to investment management and launching an online service within an organisation

Jane praises how successful Investec's Click & Invest ad campaign was earlier this year, however, can't afford to compete with the likes of Schroders who are battling to be "front and center".

Eventhough the industry would have prefered if the robo arm from UBS had not shut down, Investec has still got a growing and broad customer base after starting one year ago. 

People invest approximately 50/50 in cash ISAs and stocks & shares ISAs for which Jane believes it would be much more beneficial if more investments were put in to stocks and shares ISAs as “the money would be working harder”.

Jane is uncertain that the big tech companies like Google or Amazon would expand in to the robo industry due to "there being a lot of regulation sitting around this space so it's doubtful they would see it worthwhile".

An investor perspective: Who will win in wealthtech?

Wealthtech is currently focusing on the investing strategies but are now shifting on to "performing" said Cristophe. He also mentions "there is a demand for data to know what exactly the audience want". 

Tim had the opinion that "robos are struggling for a customer base and are only a product".

Graham supported this opinion suggesting that robos need to offer something in addition such as education or advice to improve accessibility to invest.

"Personal savings in the UK is much lower than that in Australia and Singapore who are forced to put 10-15% of their income in to an ISA", Graham added.

How tech and AI is finally disrupting wealth management

Nikolai comments on how wealth management is changing very gradually through three concepts: disintermediation, automation and personalisation.

Running through the process of Exo's investment platform, the client journey involves risk profiling, investment preferences and the portfolio creation.

He then explains that the AI technology analyses the market daily and adjusts the portfolio accordingly with no extra cost to the customer. Exo absorbs the costs for the adjustments following an agreement with an exchange.

"B2B brings much more revenue and is needed to help the growth of D2C."


Why advisers are the future of digital wealth management

Simon used the metaphor that going to a financial advisor is similar to going to a GP. “People need the reassurance of a professional because people don’t trust themselves when it comes to investing”.

“Customers appreciate good financial planning over questionable advisors offering FTSE.”

Something the financial services industry is lacking is empathy because it is very male driven, Simon said.

He also mentioned how the “financial advisory market is not efficient, but it is still making money” and therefore is replaceable.

Digital wealth management: Industry update

Simon believes that "the core of the company is digital because that's what is scalable".

With the recent introduction of open banking, Dann says that this will bring an opportunity to give a more "personalised experience".

There is a difficult guidline to follow when it comes to open banking regarding GDPR but Simon thinks that companies are "quick to rectify any problems they might cause".

Brexit being a hot topic, Brian said he has seen minimal impact with WealthSimple's primary market being in Canada. However, Simon said that Scalable Capital have noticed potential hires delaying their responses because of it. 

New frontiers in digital wealth

Rezaah announces the new "robo manager" WiseAlpha is rolling out in the coming weeks. The key features being that it displays what the customer's portfolio looks like and a tic-kbox option for customers to say what they don't want to invest in.

He also said that low interest rates drive investor's expectations. Additionally, fixed income and yield products will become more prominent in five-years.

"They don't care how easy the interface is, they only care about how much return they get."

WiseAlpha doesn't try to be detailed in "crazy analysis" but rather be thorough in going through the details of the stocks.


Headline Sponsor

Investec Click & Invest


Exo Investing
Octopus Investments
Tiller Investments


Fountain Money
Montfort Communications


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