Wealth tech is the new tech trend in the market. Robot advisers, investment services, and portfolio management tools, it has everything the tech market has been looking for. The financial industry is already deep into it. But is it here to stay? And how is it going to affect a common man? Am I always going to reach a human to help me out when I call my Spectrum service number? Let’s dig a little deeper into it all.
What is Wealth Tech?
Wealth Tech is one of the sub-sections of FinTech. Fin-Tech combines finance with technology to change how we organize, spend and send/receive our finances, on the individual and professional level. In the same way, wealth tech puts together wealth and technology, keeping in mind the goal of coming up with applicable solutions to enhance professional and individual wealth status.
What does Wealth tech have for us to take to the future? What makes this new tech worth staying at the top on the list of all techs, and how is it different from all the other techs we are already familiar with?
In a layman’s dictionary, the terms Robo-advisors and wealth tech are synonyms. Recently launched, and very popular with companies, Robo-advisors provide automated services to their users that are based upon algorithms and machine responses. They offer advice related to investment management. They have built-in consideration for factors like user’s goals, average income, marital status, investment preference, past investments, etc.
The use of artificial intelligence cuts down the use of manpower, thus lowers the cost of such facilities. Wealth Tech provides Robo-advisors which are way cheaper than human wealth advisors, and they rarely need maintenance. Also, they require no off days. Their success rate in the United States is quite high.
Nobody can work all the time. Where Robo-advisors take care of your present, Robo- retirement takes care of your future. Robo-retirement services cater to your wealth management services that you require after your retirement. They look after the details like retirement saving accounts like 401(k), 403(B), AND IRA. This facilitates individuals as well as small and midsize companies in managing their finances and savings, securing the future.
What is Digital Brokerage
Digital brokerages are platforms that allow investors and business owners to have access to stock market information about investment opportunities. Some of these services are exclusively available to certified investors only, though.
One of the trending formats is Social Investing. It allows you to see the investments done by people in your trading network. It works the same as many other social sites like Facebook and LinkedIn.
What is Micro Investment
As the name implies, Micro Investment provides its users with platforms where they can make small investments. The advantage is not having to pay the commission. The goal is to achieve financial stability over the years, without taking big risks or having to put large amounts at stake.
Other than the ones that charge a monthly subscription fee, most of these platforms, mostly designed as apps, are free to use for everyone.
WealthTech: Impact on the Industry
Wealth tech has marked its place in the industry in a short period of time. Specifically speaking, wealth management has become the need of the financial industry over such a short period of time. Industries are transforming. Wealth Tech wealth management and advising services are rapidly replacing their human counterparts and competitors and for obvious reasons. They are way more cost-effective, and efficient than traditional human wealth management firms and company advisors.
Mostly big companies and organizations like UPS have UPSers like users of any big name. They have recognized the need of the time and have opted for their personal wealth tech management tools. If they cannot yet manage it, they have opted for collaboration with the wealth tech industry to help them out and develop the necessary tools for them.
But a lot needs to be improved yet. Wealth Tech cannot function on its own without interpreting the data provided by human users. Personalization of such data has limited the use of Wealth tech to a great extent. Users have emotions, phobias, and insecurities that cannot be fixed by the use of machines. Also, a large number of population is skeptical when it comes to depending on a machine for their financial dependencies. It is important to focus on the line, the fine line which separates the humans from all tech and work on adopting the efficiency wherever possible.
WealthTech: What will be the future for us?
The future is promising, although not very well defined yet. Keeping in mind the changes that Wealth Tech has brought to the financial sector, we can certainly look towards the future with hopeful eyes.
It would be safe to say that Wealth Tech will replace human financial advisors. But when? We are not sure. It may take a decade, or ten. So what we can focus on right now is that what the Wealth Tech people should work on at this moment.
Data security should be the first priority of wealth tech providers. Security breaches are very common. When I punch in my card numbers to activate my Spectrum double play package, I make sure to look around no hacker is around. Similarly, I want to be sure about my security path between me and the companies I send my personal information to.