Consumer wealth management platforms on the horizon
Institutional grade investment management technology, typically only accessible by advisers, will inevitably become available to consumers, according to the founder of Financial Simplicity, a digital wealth management platform.
Speaking at the IMAP InvestTech Virtual Conference, Stuart Holdsworth, Financial Simplicity chief executive, said the industry was moving toward adopting a consumer-focused business model but it was not quite there yet.
“The business model around that and the sophistication of feeding data in and out of that sort of technology is yet to be resolved in many cases, but I do suspect over time that it will become available,” Holdsworth said.
Holdsworth pointed to Amazon’s recent foray into wealth management with their $40 million investment into Smallcase, an Indian consumer-focused platform which offered technology typically only available to advisers.
“The power of consumer brands and the people who have mass consumer access – [I think] it represents a real threat to the way the investment industry exists today,” he said.
Illustrating his point, Holdsworth said it only took Alibaba four years to build the world’s biggest money-market fund while Fidelity took 34 to get to the same level.
“It's representative of what the power of people with very strong consumer brands can do; when you start combining sophisticated technologies, the game can change,” he said.
AUTHOR
Liam Cormican
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
