Tech-based wealth management: a fashionable new trend or the future of investment advice?Algorithms
Technology is transforming our lives in a variety of ways. However, certain industries (like banking, financial planning and investment advice) were lagging behind for a long time. Now even these conservative sectors are changing the way they approach business and build relationships with customers. The rise of the so-called robo-advisors is making headlines in the press. First-time investors, who are generally younger and therefore more likely to try new things, are now investing part of their savings with specialised advisory platforms.
There’s a good reason for their choice. Technology allows investment management firms to cut traditional overheads and significantly reduce the price of advice. Most robo-advisors advise their clients to invest in ETFs — highly liquid and well-diversified funds. This approach allows them to minimise risks and has proven to yield stable returns for most investors.
Think about this: while banks and traditional wealth management firms in the UK charge 2% to 2.5% per year, robo-advisors ask for up to 1%. For instance, Zen Assets, an online wealth management service, has a flat fee of 0.5%. The company’s investment team has calculated that the platform allows investors to earn up to an additional 40% in net-of-fees returns when compared to a bank/traditional wealth manager.
Every investor’s asset management needs are unique, but with a wide range of investment plans and strategies all kinds of investors will find something to suit their needs.
Some investors are nearing retirement, so they may not be comfortable taking a good deal of risk with their investment strategy for fear that losses would reduce the amount of assets or regular income they have to live on during retirement. On the opposite end of the investor spectrum, young investors who have a good deal of disposable income and no need to dig into their savings in the foreseeable future may want to be more aggressive in the types of investments they make.
The best professional investment advisors, who spend their every waking hour in the office trying to understand their asset management clients’ needs, plans and appetite for investment risk, and balancing those factors with the myriad investment options available, will certainly earn their keep in the long run.
Online wealth management requires all the same skills, experience and resources as more traditional wealth management. And the best online wealth management firms provide investment advice of superior quality, just as their competitors who work out of fancy offices in large buildings. Online wealth management companies operate under the same rules and Government regulations as their “Big Office” competitors. The only real difference is that everything can be done via the phone or an Internet connection.
The client of a tech-based investment management company has the same access to the best investment opportunities as any other investor. Expert financial advice is only a call or a click away, making financial planning and investment decision-making easy, quick and accessible.
Before embarking on your online investment journey, please be sure to check whether the service you have chosen is secure and reliable. A little research will help you avoid scams and fraud. Zen Assets’ tech team has over 15 years’ experience in fintech development. They have a set of tech algorithms — “Zen Engine” — used to deliver quality investment advice. Custody and execution are provided by world-class brokers and the company itself operates under the supervision of the Financial Conduct Authority.
With a robo-advisor, you will have ready access to see how your investments are doing at any time and you will be able to make adjustments as your financial goals and strategies change. Of course we are all different. Some of us are early adopters, while others need a lot of persuading before trying new things. We encourage you to give tech-based wealth managers a chance, because they were designed to make your life as an investor more comfortable and less stressful.