Industry Updates

The term “impact investing” is usually attributed to the Rockefeller Foundation around 2007 and gained wider recognition after a report from the Monitor Institute in 2009. In 2023, the global impact investing market was estimated to be worth US$ 478.5 billion and was projected to grow to be worth over US$ 550.2 billion in 2024. According to Vontobel’s 2023 Impact Investing Survey, at least 70% of institutional and professional investors globally plan to increase their allocations to impact investments in public and private markets by 2025.

Popular types of impact investments are purchases of:

• shares in for-profit businesses that are tackling social or environmental issues, such as renewable energy companies or businesses providing affordable housing,
• shares in mutual funds and exchange-traded funds focusing on such companies, and
• bonds issued by governments or NGOs to finance projects that address social needs.

Are you considering making such investments for the good of yourself and others? Success requires the ability to assess both types of impact independently. One assessment will focus on an investment’s societal impact, while the second will evaluate its financial performance.

Assessing the societal impact of an investment

Judging the societal impact of any action – especially before taking the action – is inherently subjective. Vontobel found that 54% of investors believe non-financial performance measurement challenges hinder impact investing and that 60% are concerned about misleading or exaggerated impact claims.

Even so, new tools are emerging to evaluate the so-called impact performance of investments, particularly in publicly listed companies.

In response to growing investor interest in businesses complying with environmental, social, and governance (ESG) guidelines, a wide range of proprietary systems are available for scoring equities according to ESG metrics. These metrics are usually based on data supplied in line with stock exchange listing requirements or recommendations, governmental mandates, and frameworks from non-governmental organisations.

However, the sources of ESG data are far less standardised than many other types of data typically used for evaluating equities. It will likely be years before public companies’ ESG reporting methodologies reach the same level of uniformity as financial balance sheets and income statements.

As a result, a significant proportion of the data used for ESG scoring and analysis is the result of human judgement calls versus straightforward ledger entries. For instance, companies often disclose ESG information in natural language which must be manually analysed, interpreted, and classified to create the data used for benchmarking in scoring systems.

Assessing the financial performance of impact investments

Impact investing is not charity. While you may adjust your financial performance expectations based on the societal impact of an investment, these expectations do not disappear entirely.

It is entirely reasonable to expect market-rate returns on impact investments. In a 2023 Global Impact Investing Network survey, 90% of institutional investors and 80% of investment managers reported having such financial goals.   Furthermore, it is realistic to meet these expectations.  In 2023, the ICM Institute, the non-profit research arm of Impact Capital Managers, found in 2023 that 65% of private market ‘impact exits’ met or exceeded financial targets.

Compared to measuring an investment’s social impact, tracking financial performance is a much more established field. Financial performance assessments rely on well-defined methodologies, utilise more concrete data, and can be efficiently automated with advanced technology like Altoo’s.

Successfully monitoring impact investments with wealth management platform

Ultimately, you have the final say in what the common good means to you and how best to advance it with your money. Formulating your approach to this highly personal and quintessentially human aspect of impact investing takes time for critical and often creative thinking.

A sophisticated wealth management platform can give you this time by taking over the tedious aspects of understanding your wealth’s growth as it benefits society. Such a platform will help you monitor the financial performance of all your investments – regardless of their nature and your reasons for making them – by aggregating data from multiple sources across your entire portfolio. This data is automatically analysed and visualised in intuitive dashboards, making it quick and easy to see the overall picture of your wealth and its individual components.

Each asset can have its own digital record, to which files can be attached to document any socially-oriented rationale for holding the asset. You can also create customisable categories and watchlists for equities – such as those in an “impact” group – and set up automated alerts to notify you of market moves. We believe you will find it the perfect tool for simplifying the numerical side of impact investing, allowing you to focus on the human side.

What Could Go Wrong?

Three of the most common risks faced by wealth owners and managers are:

01 Illness, Injury, Death

What happens if you fall seriously ill, become incapacitated or hospitalised, or worse? Or if you get divorced, remarried, have more children or grandchildren, and want to make changes to your investments and estate plans that involve changes to who has access to your assets?

Will the right people have—or know how to get—access to your portfolio to ensure your investments are managed the way you desire? Or will they have to struggle through red tape and incur unnecessary legal and tax burdens?

02 Digital File Corruption

What happens if your spreadsheet or related files are corrupted, deleted, or hacked? How long will it take you to track down the missing information and put everything in order?

Your files might be irretrievably lost. And even if they are just partially damaged, the extra time needed to find and update them will distract you from other things you might want to focus on.

03 Missed Opportunities

Even if you do not suffer a health or digital mishap, you could be “leaving money on the table” by not holding the right assets at the right times. Do you have insights into market trends and patterns, dividend payments, and future cash flows? How confident are you that you have the right amount of liquidity? Are you on top of capital calls across your investments?

Private equity, hedge funds, and real estate can offer diversification benefits and potentially higher returns. However, you need to effectively track and manage such assets to stay on top of emerging opportunities and maintain regulatory compliance.

Facing all three of these types of risks, having a robust wealth management platform can make all the difference between financial success and uncertainty.

Protect Your Wealth With a Wealth Management Platform

A wealth management platform can help you safeguard and potentially grow your wealth. Here are just a few ways you can benefit from one:

• Store files with relevant documents, such as receipts, directly attached to specific wealth items to easily locate important financial data.
• Ensure secure access with up to three-factor authentication via your pre-approved devices.
• Provide access to specific data on a “need to know” basis, even at short notice, without having to slice and dice your spreadsheets and risk sharing the wrong data or messing up formulas.
• Immediately update specific individuals’ access with the peace of mind that no copies of your portfolio data are being improperly stored or circulated.
• Receive alerts and get a forecast of upcoming events to keep the broadest range of opportunities at your fingertips.
• Share information with your designated beneficiaries in a secure, web-based platform that presents data in a way easily understandable to digital natives.

The consequences of not having such a platform to support your wealth management can be significant, both to you and to those who will manage your legacy in the future. Why not give yourself and them an easy way to avoid these consequences? Don’t invest your valuable time grappling with Excel when you don’t have to.

WaaS in a Nutshell

Conceptually, WaaS is a wealth industry-focused variation of the software-as-a-service (SaaS) model. In SaaS, digital solutions are accessible through subscription-based, cloud-powered platforms.

In general, the SaaS model is best known for bringing advanced digital capabilities to users who want to avoid the significant upfront investments and fixed overhead costs associated with owning their own technology infrastructure.

In finance, WaaS platforms have entered the spotlight for giving mass affluent or even beginning investors access to digital wealth management possibilities they would be unlikely to have otherwise. Some notable examples of WaaS offerings catering to small investors include:

• Robo-advisor platforms that use algorithms to create and manage investment portfolios with low or no minimum balance requirements. EY found that 8% of wealth management clients were using fintech solutions like robo-advisors in 2021 and predicted that 18% would be 2026.
• Micro-investing platforms that allow users to invest in fractional shares of stocks and exchange traded funds with small amounts of money. The micro-investing platform market is expected to be worth over US$ 3 billion by 2032.

How Mass Affluent WaaS Providers Compete on UX and Why You Should Pay Attention

As a UHNWI advisor, you are not directly competing with mass affluent WaaS platform providers for business. Your clients likely do not have much interest in fractional shares of public equities or other offerings designed for smaller investors.

Your clients do, however, expect you to incorporate digital solutions into your service portfolio. In 2022, PwC Switzerland identified that the Covid-19 crisis had accelerated a “hybrid revolution,” with wealth management clients increasingly desiring a blend of digital and personal service. PwC drew a parallel between the remarkable popularity of Robinhood, an American trading app with several WaaS-style features, and wealth management clients’ expectations for seamless digital interactions and self-service options mixed with high-touch personal advice.

Therefore, it is worth paying attention to how mass affluent WaaS providers compete beyond just fees and account minimums. These businesses, often with limited (or no) focus on human advisors, prioritise a cutting-edge technology user experience (UX). Their strategies for winning and retaining clients can provide valuable insights for developing your own hybrid advisory client experience (CX) strategy.

Mass affluent WaaS platform providers aim to deliver good UX primarily through:

• Understandability: These platforms democratise investing by visualising data with progress bars, tooltip explanations, built-in glossaries of financial terms, and other features making complex financial concepts more accessible. Intuitive interfaces, clear navigation, and simple workflows make it easy for users to find the information they need.
• Personalisation: The platforms typically allow users to tailor portfolio-design algorithms to individual needs and risk tolerances with customisable goal setting and tracking. Many solutions also provide automated recommendations based on users’ goals and financial data.

Translating Mass Affluent WaaS UX Lessons into Superior UHNWI CX

You should draw two conclusions from the rising popularity of mass affluent WaaS platforms and your clients’ increasing affinity for digital solutions:

01 Investors want self-service ways to easily understand their wealth. 

For your clients – in comparison to lower net worth investors – understanding their wealth is less about educating themselves on basic investment options and diversification strategies. Instead, UHNWIs typically need to understand the overall picture of their already diverse portfolios. These portfolios include a wide range of both bankable holdings as well as lifestyle assets like luxury watches and exclusive real estate that are out of scope for less sophisticated investors.

02 Investors expect data-driven, personalised advice. 

For many users of mass affluent WaaS platforms, purely automated recommendations based on their financial data are preferable to no recommendations at all. Algorithms, however, cannot fully account for legacy goals and other unique elements of UHNWIs’ complex, nuanced financial lives. Your clients know and can afford the value of human insights. Research has consistently shown, even as far back as 2018,  that automation technology such as artificial intelligence delivers the most value when combined with human oversight. 2023 academic research found that the greatest benefit of automation is its ability to free people from mundane tasks and create time for more creative focus.

Advanced wealth reporting solutions are designed to help you act on these conclusions. They can automatically bring together data from across your clients’ wide-ranging portfolios of both bankable and non-bankable assets, analyse it, and visualise the results in clean, intuitive dashboards. Clients can easily interpret this information themselves, accessing it anytime and anywhere through the web or a mobile app. Additionally, customisable alerts for market movements, account balances, and more can be configured to prompt strategic follow-ups with you via secure, one-stop messaging via the platform.

Level Up Your Digital Client Experience with a Digital Wealth Platform

Broadly speaking, mass affluent WaaS platform users and your UHNWI clients share similar goals when it comes to using wealth technology: achieving portfolio visibility and receiving personalised advice. The key difference lies in goal complexity. UHNWIs have more diverse portfolios to manage and unique needs that algorithms alone cannot address.

Successful mass affluent WaaS platforms have developed battle-tested strategies for delivering superior technology UX that helps smaller investors meet relatively less sophisticated financial goals. Your business model is about more than just UX, but do not expect financial heavyweights to settle for UX not on par with what is available to lightweights. 

Leverage the UX lessons from the world of mass affluent WaaS to guide your digital strategy for empowering:

• your clients to understand their wealth and
• yourself to tailor recommendations that foster wealth growth.

With an advanced digital wealth platform you can quickly acquire the digital capabilities necessary to thrive in the world of hybrid advisory.

According to an EY report from 2023, modern wealth managers face a simple but challenging imperative to “do more for less.” That means delivering more valuable services for more clients without sacrificing profitability for the firm. EY identified technology is a critical factor in rising to this challenge. The key questions, however, are:

• Where should you aim to add value? What should you focus on delivering for your clients and your firm?
• What technological capabilities will best help you deliver on these priorities at cost-effective scale?

According to our research, you should focus your efforts on enhancing performance, personalisation, and perspective – all while maximising productivity for your firm. Below, we outline the technological capabilities that best support each goal.

01 Performance: An Old Expectation Met Better with New Technology

The most basic of wealth management client expectations is that their portfolios grow. Unsurprisingly, EY found that investment performance was most commonly cited as a top decision driver when selecting a wealth manager, with 46% of surveyed clients indicating as such. An overwhelming 73% of the same clients said they would change their investment approach in response to decreasing portfolio value.

You no doubt know that data is critical for making well-informed, performance-maximising investment decisions. The wealth business is ultimately about helping clients achieve numerical results, after all.

You have probably heard data referred to as the “new oil,” i.e. the most important raw material across multiple modern industries. Winning insights (the “new gasoline”) can be extracted from it through analysis. In fact, data is more like sand in that individual pieces of it have little value. Sand is usually bought by the ton for whatever it will be used for; similarly, data is truly valuable only in large quantities. Patterns and trends can be identified best by correlating, comparing, and analysing multiple data points.

As a wealth manager, you should therefore know that good data aggregation – the process of collecting data from various sources into one place – is the foundation of good data analysis. The more high-quality data is available, the better your data-driven insights can be.

A sophisticated wealth platform can automatically aggregate and analyse data from a wide variety of sources. It can bring together market data from the industry’s best sources to enable automated analysis of client’s holdings versus standard and customised benchmarks.

02 Personalisation: The Leading Factor in Better Client Experiences

According to 2023 research from Capgemini, a report-topping 76% of wealth management executives said that delivering a better client experience was their top priority. 68% of the same respondents said they were investing to support evolving client demands.

These demands are all about personalisation, specifically with respect to:

• Advice. Clients, especially younger ones, want data-driven recommendations hyper-personalised to their individual goals and circumstances. McKinsey predicts that by 2030 80% of new investors will want such “Netflixed” advisory.
• Engagement. Capgemini found that phone calls were among high net worth clients’ top two most commonly preferred communication channels across their entire journeys with wealth managers, from choosing a firm through onboarding to receiving advice. Face-to-face meetings also proved popular.

Technology can help you meet both expectations by:

• Aggregating clients’ own wealth data to analyse and monitor. According to Deloitte, “advisors must make use of customer data and analytical technology in order to hyper-personalize their offerings and services, and build trusting—and lasting—client relationships.”
• Freeing up time for one-on-one client conversations. Judging from McKinsey statistics, a significant portion of your workflows are likely automatable. The consultancy found that workers in finance and insurance spend more than half of their time collecting and analysing data, tasks that are ideal for automation using currently available tools.
• Easing on-demand updates on portfolio value and other information. Clients do not necessarily want or need to hear from you every hour with the latest updates on the values of their portfolios. And especially for younger clients, simple questions or requests are often handled best through messages sent whenever and wherever necessary. According to Insider Intelligence’s Mobile Banking Competitive Edge Study, 89% of survey respondents said they use mobile banking. Furthermore, a full 97% of millennials indicated their use of mobile banking.

A sophisticated digital wealth platform will package these personalisation-empowering benefits into one solution that:

• Brings together and analyses each client’s data from banks and a wide range of other sources. Based on the analytical results, you can provide the provably customised advice prized by today’s clients.

• Automates many of the tedious analytical workflows that are keeping your time and attention away from clients.
• Enables self-service portfolio value monitoring as well as one-stop secure messaging between you, your clients, and their tax consultants, lawyers, and other advisors – all via a SaaS portal or a dedicated mobile app. Automated alerts can be set to notify users of market moves, account balance changes, and more. Also, documentation and tasks can be attached to each asset to facilitate record-keeping and eliminate the need to hunt through email chains.

“The way I see it, wealth management involves both data and human relationships. Advisors need to strike an optimal balance to deliver valuable, data-driven insights the way their clients want these insights delivered,” says Simon Kaufmann, Head of Business Development at Altoo AG.

03 Perspective: The Big Picture for Clients with Diverse Portfolios and Service Providers

Your clients likely know they should not put all their investment eggs in one basket. Research suggests they think along the same lines when it comes to their financial service providers.

According to EY, the tumultuous markets of the early 2020s prompted 33% of wealth management clients to seek advice from a wider range of sources. This trend will likely accelerate: 53% of clients worldwide said they would seek out independent advice in the event of future volatility, and 28% plan to do so regardless of market conditions.

Similarly, Cerulli identified a preference among investors to diversify their service providers: while 74% of the affluent individuals the consultancy surveyed said they believed their primary investment provider could solve all their financial needs, a less impressive 58% would said they would prefer to work with only provider, and only 37% said they take care of cash management at the same firm handling their investments.

EY suggested embracing demand for multiple opinions and service providers by acting as an orchestrator within your clients’ broader investment environments. The consultancy expects that by 2026 18% of clients will be using fintech solutions, most of which are not confined to working with any one financial institution in particular.

A powerful way to position yourself as your clients’ wealth orchestrator is to partner with a fintech able to visualise all their financial data. With such a partner, you can give clients a complete, easy-to-understand view of all their assets held at different institutions and illustrate how your recommendations tie in with what is literally the big picture of their finances.

According to Simon Kaufmann:

“Most clients think first about how their overall portfolio looks before diving deeper into how to improve specific aspects of it with decisions about investment opportunities, liquidity needs, or allocation adjustments, for example. It is important to provide a comprehensive overview of each client’s entire wealth with options to drill down into details – even granular ones like transaction fees – for individual holdings. Zooming out or zooming in, you should help clients see their wealth from every angle.”

04 Productivity: A Capacity Challenge in a Competitive Industry

As they face mounting fee pressure, new and evolving distribution channels, and the emergence of innovative products from fast-moving competitors, wealth management firms’ ability to stay profitable depends more than ever on ensuring their teams’ capacity to deliver superior, personalised services.

Capgemini found that more than half of high net worth individuals factor in the availability of value-added services like inheritance planning when choosing a wealth manager. Less than half of the same individuals, however, were satisfied with their current relationship managers’ abilities to deliver such services.

Behind this mismatch, Capgemini identified disconcertingly poor relationship manager productivity. Relationship managers were found to be spending more than two-thirds of their time on non-core activities that do not generate revenue. Training, onboarding, and compliance were their biggest drags on productivity, taking their time and attention away from core activities like portfolio management and all-important client interactions.

The results, according to Wealth Dynamics, are a tremendous amount of missed opportunities, with 42% of clients being contacted only once or twice a year. Only 10% of wealth managers said they believed their customer relationship management or contract lifecycle management solutions were good enough to satisfy their growth objectives.

Correspondingly, Salesforce and WealthManagement.com found improved productivity was one of the top two goals for 84% of surveyed wealth management firms with regards to evaluating technology needs and new investment areas. 62% highlighted an improved client experience and 34% indicated better profitability.

An advanced wealth platform can streamline the process of formulating and visually communicating personalised, performance-maximising advice. Instead of manually navigating spreadsheets and creating reports, you can have all the data necessary to support your recommendations available in a few clicks, beautifully presented and easily understandable. Designed to be intuitive for all users, both advisors and clients, onboarding and setup should typically take only a few weeks.

All three of wealth managers’ top reasons to digitalise as identified by Salesforce – improved productivity, client experience, and profitability – are in fact different sides of the same tech-enabled scalability coin. Heightened productivity stems from dedicating more time to personally adding value for clients. This value comes in the form of tailored, data-driven advice to maximise performance that is aligned with their personal goals and contextualised within their overall financial lives. The extent to which your firm delivers this value, likely by incorporating an element of wealth orchestration into your offerings, becomes the decisive factor in achieving profitable scalability.

According to Knight Frank, an average of 32% of European ultra-high-net-worth individuals’ total wealth is allocated to primary and secondary homes. Austrian UHNWIs are particularly fond of such assets, putting 59% of their total wealth into them. Commercial property is even more popular among UHNWIs around the world, whom Statista found allocating an average of 21% of their total wealth towards directly holding it and 12% towards indirectly holding it through funds or real estate investment trusts. In Switzerland, the Swiss Asset Management Institute identified real estate as asset managers’ favourite alternative asset class to include in their mixes in 2022.

Clearly, investors like real estate. They have many good reasons to do so, including that it often serves as a secure, effective hedge against inflation and – especially for the wealthiest of investors – a key component of an affluent lifestyle and a family legacy. In general, real estate has a reputation as a “safe” investment asset class where prices tend to rise more than they fall, as exemplified by the recent case in Switzerland.

There are, however, a couple of particularly challenging aspects of owning real estate directly:

01 Properties Have Unique Types of Expenses

To effectively manage an investment portfolio, it is necessary to have a clear understanding of the value of every asset in it, each asset’s associated expenses, and how each one fits into the overall portfolio.  A primary purpose of a digital wealth platform is to help investors and their advisors gain such an understanding by bringing together and presenting financial data from multiple sources.

In the case of traditional assets like equities or funds, there are relatively few forms of expense data to track. Transaction costs or management fees are the most common examples.

Directly owned real estate, on the other hand, comes with a variety of expenses – like utilities, property taxes, refurbishment costs, and insurance premiums – that are practically never encountered with traditional financial assets. Using spreadsheets to track expenses for any asset is tedious and risky, but for real estate assets they are particularly cumbersome.

Here, a sophisticated digital wealth platform incorporating features to support real estate investing can help streamline the process of weighing up the financial costs and benefits of keeping particular properties in a portfolio.  For example, such a platform can allow property owners and their advisors to:

• track properties’ current and historical valuations, particularly beneficial considering that real estate holdings, especially high-end residential properties, tend to be relatively illiquid, with market data often limited and/or slower to obtain,
• place these valuations within the context of macro and micro property price trends,
• track all expenses,
• upload and attach contracts, insurance policies, renovation bills,
• tag relevant transactions for various reasons like tax relevance or valuation updates,
• observe the status of mortgages and other liabilities, and
• project cash flows.

It is also worth noting that a wealth platform can consolidates and visualise data from across an investor’s entire portfolio – with respect to properties as well as all other forms of bankable and non-bankable assets including, for example, private equity – to give a comprehensive, easy-to-understand view of his or her total holdings. This visibility allows investors and their advisors to:

• make data-driven decisions about whether to keep or divest specific property holdings and
• understand exactly how much of their overall wealth is parked in real estate, particularly helpful in liquidity planning given the generally slow-moving nature of most real estate markets. Among all the assets a UHNWI is likely to hold, properties are among those requiring the longest time to sell at asking price.

02 Real Estate Is Immovable, but It Has Many “Moving Parts” To Manage

Each property – and therefore the experience of owning it – is unique. Generally, no two pieces of real estate share exactly the same location; similar properties only a few hundred metres apart may be valued differently. Also, every building is likely to have one-of-a-kind physical characteristics and perhaps even historical significance. A property owner will thus often need to oversee on a case-by-case basis:

• Operational workflows related to interacting with tenants, construction companies, banks, insurers, and other third parties.
• Compliance with local regulations concerning the property itself. Locations can be subject to specific zoning laws, for example. Also, many European countries including Switzerland, Austria, and Germany have strict energy efficiency rules in place.
• Compliance with local laws concerning property ownership and transfers. Regulations around owning and inheriting real estate can vary considerably between countries. Swiss rules often make gifts of owner-occupied properties challenging to navigate for households. This sort of location-specific complexity typically prompts real estate investors to pay special attention to how they legally structure their ownership of individual properties.

In the face of such organisational and regulatory hurdles – which can be particularly perplexing for a spouse or other heirs in case of an UHNWI’s untimely passing – many wealthy property owners rely on the advice of trusted local advisors like real estate professionals, tax consultants, and lawyers.

Here, the key benefit of a digital wealth management platform lies in securely facilitating workflows and information sharing among multiple stakeholders. A wealth platform can give property owners a secure, one-stop digital environment for:

• Interacting with property managers, family members, or anyone else involved in the ongoing management of properties. The level of each user’s privileges can be customised on a “need-to-know” basis to ensure confidentiality.
• Getting an overview of the legal ownership structure used for each property.
• Storing lease agreements, titles, mortgage contracts, and any other type of records associated with individual properties. All documentation is far more accessible and easier to categorise compared to hunting through email chains and checking who is in CC. Also, access to information can be easily limited to defined users as required.

A platform can be hosted in a private cloud, allowing users to connect from anywhere via the web or mobile app with full confidence in data security.

Make Real Estate Investing Simpler

While real estate is often considered a passive investment, directly holding it is far from entirely “hands off.” A wealth management platform can make it as simple as possible by automating the most tedious aspects of tracking the values of properties, determining the total costs of owning them, streamlining workflows around them, and visually contextualising them as elements of entire portfolios.

Based on feedback from a wide range of wealth platform clients, from individual wealth owners and their involved family members through family officers and advisors directly employed by those individuals to asset managers responsible for managing the wealth of multiple clients, we’ve compiled a Top Five list that we feel is representative of what wealth managers want from any wealth management platform:

Everything, Everywhere, All in One Place

One of the most significant advantages of wealth management platforms is centralized access to financial information. Users get a dashboard where they can get a comprehensive overview in a single place.

Many clients listed “viewing all assets in one place” among the reasons they were drawn to their platforms, and also one of the top benefits received. A comprehensive digital management platform with an intuitive interface can let clients keep track of their total wealth.

Data can be aggregated daily for both bankable and non-bankable assets such as private equity, real estate, and other investments — plus, a platform can offer additional features including secure document storage, monitoring and reports. If clients want to track investments such as collectibles, you can attach photos and purchase receipts for easy access. This also comes in handy in the event you need to provide information for insurance: with a platform you can easily find all that information in one place. You can also take advantage of dynamic visualizations, making it easier to understand your investments and make informed decisions – and easily generate dynamic, simple-to-understand reports based on data from all areas of your total wealth.

Efficiency Gains

There’s no question that a wealth management platform is more efficient than a spreadsheet, or multiple spreadsheets. Bank and market data is automatically imported, removing manual work and reducing risk at the same time.

Many clients also cited “saving time and effort” as one of the standouts of their platform. By centralizing access and automating data aggregation processes through direct bank connections, he platform enables clients to save time and effort that would otherwise be spent on manual financial management. Clients reap the benefits of real-time information, with no need for manual data entry or concerns around accuracy, so they can focus on safeguarding and growing their wealth.

Platform and Data Security

Given the sensitive nature of financial transactions, security is paramount. Your wealth platform provider should be investing in robust security measures, such as multi-factor authentication, encryption protocols, and transparent privacy policies — and communicating them with you.

Advanced security features were also highlighted by clients. Data can be encrypted using the highest standards to ensure secure communications and document storage. Often, clients can control access rights, customizing exactly what to share with specific individuals, and under what circumstances. Two-factor authentication is the default, and three-factor authentication can also be set up for an added level of security. Backend systems should also highly secure: it is possible to keep all data secure in a private cloud within a trusted data center, with several backup clusters and a hardware set up for failover in the event of an outage.

An Intuitive User Interface (UI) and User Experience (UX)

Easy navigation, clear design, and efficient processes all contribute to a positive user experience. Your provider should prioritize UX design to ensure you can effortlessly manage your finances.

Intuitive UI provides clients with a user-friendly experience, making it easy to navigate complex financial data and perform essential tasks with ease. Through advanced analytics and reporting capabilities, a wealth platform can provide clients with valuable insights into their financial performance, investment trends, and opportunities for optimization.

Customer Service Is Paramount

While all the benefits that a wealth management platform has to offer are highly important, we believe that customer service is what can truly make or break a client’s experience.

A provider should have staff dedicated to ensuring that you take full advantage of your platform.

Financial institutions and their clients have good reasons to be concerned about cybersecurity. Firms in this sector experienced twice as many unique cyber incidents in 2023 as in 2022, according to research from IT security specialist Positive Technologies.
These institutions’ increasing reliance on the cloud has opened a wide range of attack vectors.  IBM’s X-Force cybersecurity team noted a 194% increase in cloud-related vulnerabilities and exposures in 2023 vs 2022.

The Cloud and Why Your Firm Is Almost Certainly Using It

Conceptually, the cloud is a model of on-demand access to computing resources like storage, processing power, and software, delivered over the internet. The cloud allows you and your colleagues to access data stored centrally in a remote server as opposed to a single computer located in your office.

In 2023, 98% of the financial services providers surveyed by the Cloud Security Alliance said they were using some form of cloud computing. And according to the International Banker, more than 44% of financial services organisations had data in the cloud in 2023, and 52% will in 2024.

Almost every cloud setup involves remote (off-premises or “off-prem”) data servers that are not located in the same place as the users accessing the data stored on them. There are, however, three different cloud deployment models distinguished by who has access to and control over the remote servers:

• Shared cloud (also known as a public cloud): This deployment model involves multiple users sharing remote servers owned and operated by a cloud service provider (CSP). Examples of well-known CSPs include Amazon, Google, and Microsoft. Shared clouds are often considered relatively cost-effective, easy-to-set-up, and quickly scalable options for cloud computing.
• Hosted private cloud: Here, a CSP owns and operates remote servers used exclusively by a single organisation. Dedicated resources mean higher costs, but users have more control over configuring resources to meet specific organisational requirements related to performance predictability and compliance with data regulations, for example.
• Private cloud: A private cloud involves dedicated cloud infrastructure owned and controlled by a single organisation. While this infrastructure may sometimes be located on-premises within the organisation’s facilities, a prevalent practice is “colocation,” or leasing space for the servers from a data centre provider. These providers primarily handle physical security, electrical power, connectivity, and other similar necessities not related to the inner workings of the servers. While generally the most expensive of cloud computing models, private clouds offer the highest degree of customisation to meet specific organisational needs, control over data storage and access, and performance for particular workloads and requirements.

It is also worth noting that so-called hybrid clouds combine at least two of the above types of cloud environments.

Cloud Security Risks

The growing popularity of cloud computing, estimated to account for 68% of all external IT spending in 2023 according to HG Insights, has brought a heightened focus on cloud security. The total cloud security market reached US $76 billion last year, with financial institutions spending a report-topping $23.4 billion on related solutions.

Broadly speaking, the challenges these solutions present depend on the type of cloud the organisation is relying on.

• Shared cloud security concerns: Because the CSP manages infrastructure, users do not have complete control of their security posture. Sharing resources with other organisations increases the chances of potential security vulnerabilities, as attacks on one domain can impact other domains relying on the same components and code.
• Hosted private cloud security concerns: While a dedicated environment allows an organisation greater flexibility in implementing security measures, CSP employees may still be able to access – if not necessarily decrypt and read –  the organisation’s files. Encrypted files can be accidentally or intentionally damaged, often leaving the organisation with limited technological recourse.
• Private cloud security concerns: Private clouds offer the ultimate in cloud security – for organisations that know what they are doing. The organisation is in complete control of its servers and must have the expertise to deploy advanced mechanisms like firewalls, intrusion detection systems, and access controls. Such expertise is not easy to get: 80% of enterprises Flexera surveyed said a lack of expertise is their top cloud challenge. The Cloud Security Alliance found that only 29% of surveyed financial firms said that their staff had a high knowledge of cloud security.

Cloud Choices in the Financial Industry

Judging from Cloud Security Alliance statistics, your firm is likely to be relying on a hybrid cloud powered by at least one CSP, with different types of data handled in different environments. Of the financial service providers the Alliance surveyed,

• 84% said they were using a public cloud to store at least some regulated data, including what would be termed personally identifying information under the EU’s General Data Protection Regulation,
• 59% said they were storing or processing regulated banking data in cloud services,
• 28% said that more than half of their regulated data was stored in a public cloud, and
• 57% reported working with more than one CSP.

Your takeaway? To be able to give your clients an accurate overview of how their data is secure in your cloud, you’ll probably need to do a little homework.

A good starting point would be to find out which CSPs you are working with, the types of cloud you are using, and the tiers of the data centres where your cloud data is stored. Tier 4 is top of the line.

Actionable Insights

• Your firm is a top target for cyberattackers – Expect clients to ask you where their data is stored and how it is secured.
• Your firm is almost certainly using the cloud – There are three main types of cloud; find out which one(s) you are using.
• Cloud models are not all equally secure – Know the basics on how they differ with respect to security.

It’s no secret that entering large quantities of data into spreadsheets is time-consuming and increases the risk of errors. Manually importing portfolio data and bank statements can make things move a little faster, but doing so requires extra work to map fields and make any formatting adjustments needed to ensure all the data flows through correctly. Even if the data is good, however, it still needs to be reconciled.

That’s where back-end bank connectivity combined with a wealth management platform can make a significant difference. A wealth management platform can connect directly with your banks, eliminating the need for manual statement and transaction entry and delivering a real-time holistic view into your assets.

The Benefits of Bank Connectivity for Wealth Management

In many ways, a wealth management platform can effectively act as your digital assistant. Just log into the platform and your data will already be populated, reconciled and up-to-date — no need to manually enter anything. All transactions are reconciled daily to maintain data integrity, saving you time and ensuring accuracy. The platform takes care of converting transaction and statement formats, mapping fields, and data validation so you can spend your time on things you care about. Your digital assistant is always working and never takes a vacation, so there are no delays or backlogs of information to enter.

Connectivity with banks can also allow the platform to automatically match transaction flows, flag transactions for manual review, and link transactions to individual assets. For example, say you withdraw €5,000 from one account to buy stock shares in another account that subsequently shows a new €5,000 investment. If an automated match cannot be made between these transactions, a sophisticated platform will nevertheless identify a correlation between them and ask you to confirm the match to ensure everything is correctly tracked. Any rogue transactions — those without a match — will also be surfaced for review, helping to identify any potentially fraudulent activity.

Comprehensive Wealth and Asset Management

In addition to streamlining banking data, a wealth management platform can offer comprehensive solutions for managing non-bankable assets such as collectibles, real estate, and even luxury assets like yachts. You can link these assets to a cash account, track expenses, and automatically calculate your total cost of ownership along with profit and loss from revenue streams.

Security and confidentiality are paramount in wealth management, especially when dealing with sensitive financial information. An advanced wealth management platform addresses these concerns through access controls, role-based permissions, and advanced encryption techniques, ensuring that data remains secure and accessible only to authorized individuals.

Additionally, a wealth management platform can offer secure storage for documents such as private equity agreements, certificates of purchase, emails, or even digital notes pertaining to transactions, enabling users to digitize and centralize records for easy retrieval and peace of mind.

An Investment in Time Savings

How much more could you do if you had more time? Built-in bank connectivity is just one of the wealth management platform features that can give your time back. Leveraging advanced technologies, a platform can empower users to streamline workflows, enhance decision-making capabilities, and achieve greater financial success. Rather than spending your time gathering data and crunching numbers, you could be researching new investments — or spending time on that yacht.