Modernizing Wealth Management To Encourage Diverse Portfolios

Will the modernization of wealth management see more diverse portfolios?

The emergence of several disruptive elements such as wealthtech in the last decade has been linked with modernizing wealth management. Experts at McKinsey say the North American wealth-management industry is on the cusp of change and will experience a significant alteration in the next few years. Wealth managers also hope that the wide-spread adoption of technology in the industry will lead to more diverse investment portfolios. It’s safe to say that their aspirations appear to be coming to pass.

1. Wealthtech is giving investors direct access to the markets

It used to be that investors relied on their brokers and wealth managers to pick individual stocks and the best assets on their behalf. Today, however, many investors through mobile apps and various web-based resources can now buy and sell assets in real-time by themselves. This means they have greater flexibility over what’s in their portfolios than ever before.

2. Technology is providing investors with resources to learn more about investing

Modernizing wealth management has led to an upsurge in the number of people interested in learning how to properly invest. With access to teaching mediums and sites like YouTube, people of all ages are taking charge of their own portfolios and implementing strategies such as Ray Dalio’s All-Weather Strategy to create balanced portfolios. Access to information enables Generation X and Generation Y investors to cast their net wider with more confidence than baby boomer investors.

3. Investors today have recourse to Robo-advisors round the clock

Robo-advisors now account for 65% of the market share in the wealth management industry. Relying on superior AI, Robo-advisors can quickly digest investor metrics, scan databases, and check market conditions within a few minutes in order to give clients customized advice. This kind of tailored advice provided by these AI-powered robots cannot be matched by human beings. This is of course advantageous for investors as they get real-time advice whenever they need it, encouraging them to invest as and when they like.

4. New asset classes mean greater investment choices

30 years ago technology stocks were not sold as widely as they are today. With many of the leading tech companies today being barely two decades old, and showing no signs of slowing down in terms of growth, wealth managers would do well to encourage investors to consider widening their horizons by including a few choice tech stock picks. New asset classes will invariably lead to more diverse portfolios. If you’re eager to get started, business forecasts publisher, Kiplinger has even outlined some of the best tech stocks to include in your portfolio.

5. Younger wealth managers are leading the clarion call for change in the wealth management industry

At least 45% of the country’s wealth advisors are older than 55 years. The new lot of wealth managers welcome the idea of modernizing wealth management. They understand the concerns of the new generation of investors and their need for more diverse portfolios. These upcoming wealth advisors’ clarion call for change also brings with it new wisdom on how to best navigate the new markets in the post-COVID financial world.

To read more about what’s happening in the wealth management industry, check out my blog Bridging The Gap In Wealth Management with Wealthtech.