The do-it-yourself DIY phenomenon has made its way into the financial world and looks like it’s here to stay. 

The old wealth management system where customers had to reach out to advisors for every minor update or question is quickly phasing out as customers are demanding digital tools, backed by modern technology, for managing their wealth. 

If you’re a financial advisor who’s curious about the practical applications of fintech, then keep reading because we’ll discuss the top six uses of fintech in wealth management in this article. 

A Quick Review: Understanding the Role of Wealth Management Technology

You might already know that wealth management involves managing your client’s assets and liabilities and helping them plan for their financial future based on their specific goals and risk appetite. 

Wealth management fintech is where you do all that with the help of technology such as robo advisors, portfolio management software, and digital communication channels. 

6 Essential Uses of Wealth Management Fintech for Modern Advisors 

You can use fintech in wealth management to do the following…

1. Leveraging Technology to Enhance Data Analysis

Since banking and investing is highly regulated, your clients share a lot of data which is mandatory for know-your-client (KYC) rules when they open an account with a bank or your company. 

You can pass that through ML and AI-based wealth management fintech tools to quickly analyze this data to understand customer behavior, preferences, credit health, and investment patterns. This is a key role of fintech in reducing overhead costs.

That way, you can offer your customers an unmatched personalized experience and give yourself a competitive advantage. 

2. How Wealth Management Technology Reduces Overhead Costs

Advisors who manage accounts the old-fashioned way have to call their customers to individually update them about their finances or attend to clients who walk into their offices to ask for updates. 

Or they have an entire team who helps them sort clients’ data, stay on top of their investments, give advice, and send out regular updates. But by using wealth management fintech tools, you can save all that time and overhead costs by having your clients check their dashboard on the app or website and just ping you if they have questions. 

You can also automate trading and advice for your customers so they can make transactions without you as the financial intermediary. That way, you can reduce the size of your team or engage them in more essential tasks that contribute to bringing more clients to you. 

Fintech tools help you automate repetitive, mundane tasks to have fewer yet more valuable, personalized interactions with your clients.

3. Enhancing Customer Convenience with Wealth Management

Survey shows that nearly 24% of potential clients abandon applications due to lengthy onboarding processes at banks and investment agencies. 

Similarly, approximately 32% of customers won’t even start an application if they’re required to come into your office to submit ID credentials. 

If you want to increase your client acquisition and retention rates in 2022 and beyond, you need to use wealth management fintech to improve your services and make wealth management convenient for your customers.

4. Lower Client Acquisition Costs and Timeline 

High client acquisition costs are often one of the primary reasons why some wealth management firms can’t expand as much as they’d like. 

High client acquisition costs are often one of the primary reasons why some wealth management firms can’t expand as much as they’d like. Maintaining a robust client acquisition strategy in wealth management is a critical aspect to focus on if you aspire to thrive in the fintech landscape.

One way to decrease that is through a smooth and swift onboarding process, which wealth management fintech is excellent for. While it elevates customer experience, it also reduces the number of hours you need to spend on each client intake, thus reducing costs all around. 

For example, you can use programs to digitize and store KYC information data, so you don’t have to ask for it multiple times. 

Similarly, instead of having customers sign 20-some pages and wait for 3-5 business days for their account to set up with your wealth management agency, you can use fintech software that helps you speed up the process.

5. Scaling Your Wealth Management Business in Fintech

Using wealth management fintech tools opens up a pool of clients that you couldn’t access before due to geographical locations, language barriers, excess workload, and lack of efficient resources such as communication and client management channels. 

By automating your tasks with robo advisors or similar fintech software, you become available to new customers. 

Hence, fintech helps you scale your client base by expanding your services.

Similarly, fintech opens up the world of wealth management to people, often from low-income levels, who didn’t have access to it earlier. 

For the longest time, only the rich could afford good wealth management services. That’s because the service fees and investment threshold were relatively high. 

But now, you can use fintech to charge lower fees and offer low-cost services such as micro-investment services.  

6. Attracting Young Investors with Modern Digital Wealth Management

Gen Z currently makes up nearly 26% of the population, while millennials are almost 23% of the world’s population. 

These generations have been born into or grown up in the world of digital tools and same-day deliveries. They’re familiar with automated AI-backed software, which gives them personalized recommendations, and they trust it for critical financial advice much more than the older generations. 

So if you want to attract these modern investors to your wealth management platform, you need to use wealth management fintech to offer them hassle-free investment platforms and smoother overall experiences.  

In Conclusion

Wealth management is a highly regulated industry, meaning that the digital tools you use to manage your clients must comply with certain rules. 

Creating wealth management fintech software from scratch can be costly, and it might take too long for you to make back your investment from new customers. 

That’s why you should find a white-label solution, like the one we offer, and use it to create your own wealth management product. 

Using our backend, you can link your current website or app, if you have one, through a wealth management API or create an entirely new platform to enjoy all the benefits that fintech offers.

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