The Rise of Wealth: Top Trends and Strategies for Success

Brought to you by Morningstar ByAllAccounts

Wealthtech, or fintech that supports wealth management, is revolutionizing the financial management industry. In this VB Spotlight, you’ll hear about the top five trends in wealth technology right now, including how data automation is impacting the industry, innovative new opportunities, and more.

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Wealthtech is where today’s technology and wealth management meet: it’s a sophisticated fintech that uses data to not only improve investor outcomes, but also to help advisors capture more of the portfolio and deliver compelling and engaging experiences. deeply integrated for all stakeholders, including advisors and backs. -office staff.

“There has been an explosion of innovation driven by emerging technologies like AI and machine learning, as well as the democratization of investing, making it easier for retail investors to learn and participate in the market,” said Don McHenry, senior product manager. from Morningstar ByAllAccounts. . “Combined, all of these factors have prompted wealth management to scale these technologies and offer more comprehensive and compelling products and services to their clients.”

He was joined by Reed Colley, CEO and Co-Founder of Summit Wealth, a modern wealth management platform, to talk about how wealth technology is impacting the industry, the top five trends to watch, and how to stay competitive. in an increasingly crowded market.

“It is this ecosystem of platforms, apps and features that has been driven by an increased need to resolve issues within a wealth management firm, whether it be for the internal advisors themselves or often for clients,” Colley said. . “What matters most to advisors is driving a solution for their clients that allows them to really help. A lot of that starts with the data coming out of something like ByAllAccounts. Gathering that data is the key to building the tech stack and a foundation for all of these wealth technologies.”

Why investing in wealth technology is crucial

Investors today have more access to investment information than ever before and can manage their own portfolios, which means that when an investor turns to an advisor, there is a demand for their advisors to provide a high-quality digital experience.

“Netflix and Amazon set the baseline for the digital experience as investors – these companies set consumer expectations that are then applied to the advisor relationship,” McHenry said. “This expectation is coupled with the fact that more than $60 trillion is about to be transferred from the older generation and boomers to the younger generations in the next decade or so. As a result, it is important that wealth management companies quickly adapt and adopt these technologies to serve these markets or be left behind.”

Not to mention, wealth technology helps wealth management firms make their practice more efficient and reduce costs, by automating previously manual tasks.

“The bigger question is how do we help them with holistic wealth management that they can use to benefit their clients,” Colley said. “Create a customer experience that is meaningful to what is happening in their lives.”

Humanizing wealth management

Today’s technology, from cloud infrastructure to true serverless APIs and microservices, enables more effective data flow than even existed five years ago. Data security has been vastly improved by moving away from multi-tenant models, and modern languages ​​and libraries power an unparalleled customer experience, one that connects your wealth with your values.

“People are less concerned about the shift from active to passive management that has taken place in the last 10 to 20 years; less concerned with detailed returns,” Colley said. “It’s changing to, can I do what I want to do in my life? The best coaches have shifted their approach, using a fully integrated platform, to help you get to the places you want to be in your life. Not just focused on, can I drive ROI? That is what is at stake.

Anyone can crawl an index, he added; today it’s all about mapping goals and understanding the customer, and then creating a system that feels very human and precisely personalized when they use it. Investors want intimacy, fueled by empathetic engagement, to meet their needs with relevant solutions, and to know that an adviser is keeping track of changing client needs, as well as available options, and offering help they may not even know they need. they need.

“Customers don’t really want to know how much they spend on coffee each month,” he said. “They want to know: can I take this trip next year with the whole family for our 50th anniversary? If your advisor can help you get there with human tools in a scalable way, that’s what you’ll win in this space.”

The Challenges of Wealth Technology Adoption

Growth and scale are key to staying competitive, but that’s often hampered by data challenges, too many moving parts on one platform, and a lack of experience dealing with technical issues, as technology integration is certainly not an option. Core competency for a consultant.

“What we hear and see is that these technology stacks are fragmented, they are fragile, and in many cases they just break down because of what they need to do,” Colley explained. And then the tech debt starts to pile up: It becomes increasingly complex, expensive, and difficult to address issues, fix bugs, and even update systems, inhibiting the ability to scale internal operations and then potentially grow into new segments of business. customers or new markets. .

“They shouldn’t be afraid to outsource the regular consulting or auditing of their technology stack, because they should be focused on their core competency, which is their customers and the relationships they have with their customers,” McHenry said. “As for larger companies, whether you’re a stockbroker or an RIA consolidator, don’t be left in isolation. Don’t integrate new technologies in a vacuum. It is important to integrate horizontally”.

That means considering all the technologies they might be using in both the advisor and investor workflow and the use cases of internal and external stakeholders. For larger companies, it’s important to have the right resources in-house, with expertise in both the technologies and use cases across the organization.

“It’s not uncommon for larger companies to have gaps here,” he added. “If that is the case, they need to acknowledge this. They need to seek assistance or consultancy to find the right resources because development is expensive. There is a very high change cost every time they make changes to their technology stack. And, of course, they want to offer a cohesive and exceptional experience to their customers.”

In the end, it’s crucial to keep humans front and center of the equation.

“Investors have proven time and time again that the technology is great, but what can’t be matched is the human interaction,” McHenry said. “It’s being able to use these technologies and balance them with human interaction, ultimately focusing on the relationship with the customer.”

Don’t miss the whole conversation, available free on demand. You’ll get a deep dive into the top five wealth technology trends in the wealth management industry and how to stay ahead, learn about emerging innovations, and get practical advice on harnessing the power of wealth technology. .

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  • Top 5 Heritage Tech Trends for 2023
  • Why high quality use case specific data is required to power these solutions and applications
  • How tight integration of aggregated data and best-in-class market data accelerates innovation
  • And more!


  • Cane ColleyCEO and Co-Founder of Summit Wealth
  • Don McHenrySenior Product Manager, Morningstar ByAllAccounts
  • greg milesModerator, VentureBeat


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