Understanding Wealth Tech

Here are four benefits of a tech-equipped advisor

By Mike Kerins On Aug 4, 2020

Your financial advisor is probably using technology to do things like manage your portfolio and ensure you are on track with your goals. These tools are also known as wealth tech.Due to recent market volatility over the past few months, wealth tech has proven more critical than ever. Here’s what to expect in the age of COVID-19: 

Enhanced customer service: Especially when investors are spending increasingly less time meeting with their financial advisors in-person, easy access to portfolio information and data is important. Wealth tech enables advisors to obtain client e-signatures and conduct a remote onboarding process efficiently.  

When working with an advisor who utilizes wealth tech, you should expect responsiveness, and the ability to engage securely over your preferred channel of communication – e-mail, chat or phone. After signing on as a client, you should be able to log onto a digital platform to move money, view account balances, make transactions, and manage goals. 

More time with your financial advisor: The market downturn during the first quarter helped demonstrate the resilience of wealth tech. In the past few months, some of these platforms encountered their highest trading volumes, and the technology passed this extraordinary stress test with flying colors. Trading algorithms kept investment decisions aligned with individual risk tolerances, allowing advisors to spend more time with clients discussing how the market volatility would affect their financial goals.  

With confidence that trading is being managed, your advisor can concentrate on helping you achieve your financial goals. Wealth tech automates trading, onboarding, rebalancing, account opening, and asset management. In handling these back-office tasks, your financial advisor should be spending more time with you.  

More holistic financial planning: With wealth tech allowing more tasks to become automated, your advisor should function almost as your personal CFO by delivering holistic financial planning. From tax preparation support, to navigating college funding, nothing should be off the table.  

Advisors equipped with digital wealth management tools typically use goal-based investing. Rather than simply managing investments, this philosophy assigns different investment accounts toward achieving various financial goals.  

Greater opportunity for young investors: Since advisors can manage assets more efficiently with wealth tech, they have more time to spend coaching clients, especially those new to investing. This shift in focus from investment management to financial advice will help young investors get started on the right foot. As a generation adept at using technology, young investors are well-positioned to leverage these tools to manage their goals online. 

If your financial advisor is not using technology already, they likely will soon. The coronavirus pandemic has underscored the need for a digitally enabled financial experience and, as businesses work to adapt to our new normal, your wealth manager should too.

About the Author: Mike Kerins, CFA, FRM, is founder and CEO of RobustWealth, headquartered in Lambertville.  

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