Retail Investors and their Advisors globally manage $178 trillion in assets. It is also a buyers market where fees are being pushed down by investors and regulators, and there are many new entrants and competition disrupting the market. The investment service providers have also added many digital capabilities.
So why is the individual investor not setup for success? The simple answer is that current technology, services and products focus on advisors and traders. The wealth management service providers for the most have been adding digital capabilities on top of existing service models and business processes. However, it is clear that the winners in wealth management will be the ones focused on investors. What is required, is complete transformation (business, digital and AI transformation).
Note: The above diagram is indicative of trends and focus (not a precise indicator of market split)
User Perspective
While majority of the investors are focused on long-term prosperity, advisor / fund manager fees and performance end up costing them $100K to $1.5M.
It is also important to note, that while some investors would prefer to not seek advisor input, many investors would continue to depend on them to some extent. Transparency is also a requirement.
Industry Perspective
As per PwC - "Change in the asset and wealth management industry (the ‘AWM industry’) is now accelerating at an exponential rate. Although the industry is set for growth over the next ten years, asset and wealth managers must become business revolutionaries, even disruptors, if they’re to survive and prosper. Now is the time for action."
We believe these revolutions / disruptions need to focus more on the long-term investor needs.
Technology & Tools
As per PwC
"Digital technologies: do or die
The industry is a digital technology laggard. How well firms embrace technology will help to determine which prosper in the years ahead. The race is on ..."
We recommend the following approaches with respect to technology and tools
Customer First & Personalization: Solutions need to deliver high levels of personalization for customers. This includes factoring in goals and objectives, trader vs. investor, and level of financial expertise.
Digital / AI Priority: Use Digital and AI to deliver more, faster and better self-serve capabilities.
Our Approach
We developed our problem based on the following approach
1) Codified "Warren Buffett's Investment Advice" for long-term investors
2) Personalize analysis and information representation
3) Use AI to scour the Internet and organize it
4) Enable natural language interaction (via Chatbot) for Investors and Advisors
a) Increases ease of use and flexibility
5) Provide high level financial language to Advisors / Power Users
b) Advisors can easily add value, automate workflows and customize
6) Deliver learning and intelligence augmentation
See our product Asperios in action
Our framework is below (find details at)
Reference
Warren Buffett - Top 10 Investment Advice
PwC Asset & Wealth Management Report