Key Trends in Wealth Management Q3 - 2023
How can wealth management companies ensure profitable growth during this volatile era? As the industry continues navigating an increasingly difficult financial landscape, several key trends have continued reshaping how wealth is managed. Among these trends, the rise in importance of the environmental, social, and governance (ESG) factors, more regulatory attention to consumer treatment, more recognition of the financial analytics tools, and the deeper integration of AI, machine learning and automation, all stand out as notable drivers of change.
Democratising Wealth Management by Utilising Financial Analytics
The wealth management sector is embracing emerging tech like machine learning and gamification to enhance workflows. Despite inflation and conflict challenges, technology is poised to reshape finance. A key concern though is how to leverage tech to expand services while maintaining margins for mass affluent clients.
Enhance Mutual Fund Grouping Using Machine Learning
The methods used to recommend mutual funds to customers vary greatly between companies. Often the recommendation techniques used rely on using metadata of the mutual funds, such as region, category, or investment objective. By grouping using these properties investors are given an overview of funds with similar classifications and can select funds from the groups they are interested in. And while grouping mutual funds in this way may provide investors with a convenient way to explore funds that align with their preferences and investment strategy, this method of recommendation has some potential limitations and risks.
Alternatives to Gamification in Wealth Management
While the benefits of gamification could help wealth management companies to democratise investment management and empower retail investors by extending access to financial markets, it may also encourage users to trade more frequently than required and take higher risks. In an earlier post, we critiqued gamification in financial context and discussed the latest regulatory approach to these engagement techniques. In this article, we will delve into more responsible alternatives wealth managers can deploy to achieve long-term customer satisfaction and brand loyalty.