The Benefits of Automating Wealth Management

The last couple of decades has brought a significant shift in trading with the rise of Quant or algorithmic trading. The entire trading landscape has been changed since the arrival of Quant and the wealth management platform that offers it.

Neurologists have measured the decision-making capability of human beings in seconds, minutes, and hours. For example, a competent chess player can take a few seconds or minutes to decide to come up with their best moves in a game.

When it comes to the capacity to think and cognitive functioning, the limit of human decision-making capability ends at around 1,000ms. Anything faster than milliseconds becomes increasingly complex, particularly when several parameters are thrown into the mix. With more than one parameter, the decision-making process gets bogged down.

The volume of research data that has gone online in the past decade has exploded, and many high net worth individuals (HNWIs) and the organizations that manage such clients have felt the pressure to stay relevant. The result is that both HNWIs and financial services firms have sought the help of digital wealth management solutions. This varies anywhere from either seeking support for their in-person service offering or providing a stand-alone digital investment service for a fee.

What Does a Wealth Management Platform Offers You?

With the increasing inclusion of digital assets, it has become increasingly urgent for both financial institutions as well as HNWIs to use digital tools to manage not only the overall summary of their investments but also for executing orders and trades.

• Management of All Assets In One Tool: With the increasing utility and intermingling of investment vehicles, it is sometimes hard to keep track of investments that are owned by HNWIs and the investment firms that serve them. A wealth management platform can help you organize it all in one place and even provide you with a summary of events impacting your investments. This way, via various communication tools such as email, messengers, and pop-up notifications, you can be in charge of accounts in a given investment portfolio.
• Automated Decision Making: With tools like algorithmic trading, and even a crypto bot like the BTC arbitrage bot, you can pre-program decision-making authority with complete control to an automated program that watches over and makes rapid-fire investment or sale decisions for generating passive income for you.
• Efficient Reporting: With all your investments at your fingertips, you do not have to dread either filing your taxes and other reporting requirements or providing someone with information to do so on your behalf. A Wealth Management Platform does this all for you.

The recent arrival of emerging technologies like Artificial Intelligence (AI) and Machine learning (ML) further make things easier. The emerging innovations in technologies mentioned above can be seen as both a challenge and an opportunity, demanding ever-evolving technical skills. Particularly the improvements in data analytics capabilities through processes like AI and machine learning and recent technologic adoptions like quants stand to lose ground to newer FinTechs players and other industries if they aren’t careful.

The reason behind it is that the technical analysis and model design part employing human intellect is posing increasing technical demands on quants, which will eventually make it impossible to find the right talent. According to Matthew Sargaison, Chief Investment Officer at AHL Partners LLP, says, “There has been a shift towards emerging technology on the buyer side, and the urge to compete with a host of the traditional top players in the computer science field for talent and ideas: “you’re no longer in competition with Goldman Sachs, you’re in competition with Facebook and Google.”

The competition for talent doesn’t end there. It is seen as an opportunity by every firm looking to boost their quantitative business. New R&D in AI and machine learning is being discussed in the mass media more and more, but for the financial industry, this isn’t new at all. For example, artificial neural networks, a technology that had minor prospects due to the lack of computational power 20 years ago, are now magical tools for everyone who wants to exploit them for innovative applications.­

In conclusion, automating wealth management is a need, not a want, for both HNWIs and portfolio managers alike to make sure the funds are operated as efficiently as possible considering what tools we have nowadays.