Digital Wealth Management

With the advent of modern technology in the financial services industry, the roles of wealth advisors are evolving. The majority of the wealth management firms and advisors are moving towards digital wealth management and now employ digital tools such as Robo-advisors to manage the assets of clients, which not only brings efficiency in the roles of wealth managers but also provides excellent digital services to customers.

Total assets under management in the global Robo-advisor market reached  $987 billion in 2020, which is expected to grow annually by 26% by 2024.

Why should firms move towards digital wealth management?

In this section, we will discuss the main reasons why firms should adopt digital wealth management instead of following the traditional service delivery.

1- Price & risk-sensitive customers:

Following the financial crisis of 2008, the wealth of the customers quickly eroded, which has prompted them to invest in less risky assets at a low cost. Instead of paying high management fees to the wealth management firms, customers prefer investing in low-risk, low-cost index-tracking funds, and ETFs.

Investing in a system will also help firms to manage the clients’ assets by the risk tolerance of the customer. Assets of a client with a low-risk appetite will be invested in low-risk avenues and vice-versa, providing clients with the required risk-return pay-off.

2- Increased competition:

With the growing competition among wealth management firms, there is a growing need for differentiation of wealth management services as investors today have a range of choices. Firms that offer excellent customer services and have a customer-centric approach in their processes will have high customer satisfaction levels and develop a high customer base.

3- Increased regulatory requirements:

The increased regulatory requirements, source of funds, transparency in management fees, and other financial and risk management regulations require wealth management firms to invest in a robust digital wealth management system to comply with the regulatory requirements in an automated and cost-effective way. Trying to comply with the regulatory requirement traditionally not only proves costly but is inefficient as well.

Models of Digital Wealth Management:

Digital wealth management services can be categorized into three types based on the level of automation and human involvement in service delivery.

1- Automated wealth management:

2- Hybrid wealth management:

3- Technology-aided personalized wealth management:

Let’s discuss each model of digital wealth management below:

1- Automated wealth management:

Automated wealth management, as the name suggests, is designed to fully perform all the tasks from client onboarding and asset management to customer service management. Although there are varying degrees to which the tasks could be automated, many firms are trying to automate as many processes as possible to increase efficiency and attain a competitive advantage by differentiating their services and reducing costs.

2- Hybrid wealth management:

This model of wealth management employs the services of a human wealth advisor as well as the automated Robo-advisor to manage clients’ assets. Usually, a wealth advisor handles client relationship management and oversees firm-specific tasks, whereas the Robo-advisor empowers the client to make informed decisions on their assets. Robo-advisors can take into account risks and goals and use artificial intelligence, machine learning algorithms, and other technological features.

3- Technology-aided personalized wealth management:

This model suits those wealth management firms that have high net worth clients — individuals as well as business customers — having complex asset management needs. To deliver their services in a better way and meet the customized requirements of high net worth clients, wealth management firms provide technology-aided personalized wealth management services.

Advantages of digital wealth management:

Apart from automation, offers many advantages to wealth management firms, which we will discuss below:

1- Client Accessibility:

Gives increased accessibility to clients to view and perform any activity in their account using their smartphone, laptop, or computer. Clients can gather information about asset performance 24/7 in just a few clicks using the online dashboard over the internet.

2- Easy customer onboarding:

Onboarding new customers become extremely easy as account opening and other customer acquisition processes can be made paperless, allowing for a seamless and hassle-free account opening process.

3- Customer management:

Wealth managers even at small firms can manage a large number of customers with the help, thanks to the ability of a CRM, document storage system, and Robo-advisors to help the clients have a sense of empowerment and in-the-moment transparency. Records of the customers are available digitally and available readily with a few clicks, allowing for a financial approach.


To keep ahead of the competition in the wealth management industry, your firm must invest in a digital wealth management platform that can help you grow, scale, and market.

Tags: , ,
  • 0Shares
Albino Jacob
Albino Jacob
We serve a plethora of customers, fulfilling their needs and helping them with better services offered.

Leave a Reply

Your email address will not be published. Required fields are marked *