MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Posts Tagged ‘fintech’

Interview: “Morningstar meets TripAdvisor”

Tuesday, May 31st, 2016

In the following interview Oren Kaplan, the CEO of SharingAlpha, explains what the new firm is all about and why it is important to the wealth management industry.

MyPrivateBanking: Oren, can you explain the idea behind “SharingAlpha” in a few words?

Oren Kaplan: SharingAlpha is a user generated fund rating platform, or in other words, it’s where Morningstar meets TripAdvisor! SharingAlpha will also rank the fund raters in terms of their fund selection capabilities which will allow fund selectors and investment advisors to build their own proven track record. The users will also be able to construct a number of virtual fund of funds and SharingAlpha will rank them according to their asset allocation performance.

MPB: Why do you think that the collective fund ratings of investment advisors offer valuable insights given that we all have seen over and over againg that more than 80% of active fund managers are collectively not beating simple index strategies?

OK: Funds will receive a high SharingAlpha rating only when the different raters expect the fund to beat the passive alternative. Predictions based on collective wisdom have been proven to work in plenty of cases. Furthermore, qualitative fund analysis - using for example factors such as cost, capacity and active share - have also been proven to work and using a large group of market experts will make this task possible.

MPB: Is SharingAlpha also interesting for afffluent and high-net-worth investors?

OK: Yes, the fund ratings and raters ranking will certainly be followed by all types of investors.

MPB: How can the private banking industry take advantage of SharingAlpha’s offer?

OK: Number one, to improve fund selection and asset allocation recommendations based on the collective wisdom that will be shared on SharingAlpha. Number two, to build their track record and prove to clients that they are able to add value to their portfolio and justify their fees.

MPB: Thank you, Oren!

 

New Report: Mobile Apps for Wealth Management

Monday, May 30th, 2016

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The question for wealth managers is no longer if they should have a mobile app, but how they can develop a winning mobile app to provide them with an essential competitive advantage.

Almost eight years ago, in July 2008 the Apple App store was launched and Google Play followed only a few months later. Since then the app market has grown, apps have become an essential part of our lives and the technical possibilities have developed a lot. The wealth management industry is typically not among the first movers when it comes to technical innovations but we have seen that the market of mobile apps for wealth management is slowly but surely catching up. In our latest study Mobile Apps for Wealth Management we have analyzed the mobile apps of 30 of the biggest wealth managers worldwide. We have found that in contrast to the previous years, the number of wealth managers that offer dedicated apps to their wealthy clients has increased (from 63% in 2015 to 82% in our latest 2016 study).

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Arming Advisors with their New Digital Weapons

Friday, March 6th, 2015

MyPrivateBanking Research released a new report on ‘Digital and Mobile Solutions for Financial Advisors 2015‘ this week. Unlike the first two editions, which focused exclusively on mobile apps for financial advisors offered by technology vendors like Avaloq or Temenos, the new edition has a much broader perspective. Besides evaluating the developments the established vendors implemented in their mobile apps over the course of 2014, in-depth research has taken place in the fields of communication solutions (particularly video tools), recommendation and analytical solutions, as well as social media management tools.

In addition to the interviews our analysts conducted with the technology vendors themselves, they did several interviews with representatives of the leading wealth management companies, private banks and bank consultants in order to derive a deeper understanding of the actual level of digitization in wealth advisory business.

The three most disruptive trends according to our analysis are:

Remote meetings increasingly gain importance. Contributing to an omni-channel client experience, advisors are shifting more and more towards alternative digital channels like video conferencing and screen sharing tools.

Advisors are under great pressure. Shrinking margins force wealth managers to serve more clients per advisor who therefore need to be more efficient to operate feasibly. Solutions, which partly automate certain processes as well as social media management tools, are the response to these needs for an increasing number of advisors.

Clients are becoming more self-directed. With the booming app supply for retail banking clients, the high-net-worth clientele are demanding digital tools for their financial matters, as well. Hence, matching client tools empowering them to do their financial planning or even trading and portfolio rebalancing by themselves, are already standard. What has yet to be covered more extensively is the provision of advisor contacting options. Many advisory apps still lack basic communication features like video and text chat.

The report combines all the thought-provoking findings from these interviews, detailed company profiles of the vendors included with thorough descriptions of the solutions and products, and comprehensive conclusions on all these results.

 

What Can We Tell from Fidelity/eMoney Advisor Deal?

Wednesday, February 4th, 2015

/by Francis Groves, Senior Analyst/

Yesterday there was news of two major acquisitions of fintech companies in the United States with the takeover of Advent Black Diamond by SS&C in a deal worth $2.3bn and the purchase of eMoney Advisor, the financial planning software company.

The eMoney Advisor deal is reported to have cost Fidelity Investments just $250 million and reflects the fact that although financial planning software can bring great advantages to financial advisors and eMoney Advisor seems to be highly regarded in its field, the software itself seems surprisingly cheap. A license for eMoney Advisor’s emX PRO product currently costs less than $4,000 a year. Other financial planning products in the U.S. are even cheaper.

In fact eMoney Advisor offers more than financial planning software with marketing tools (advisor branded media such as videos and presentations), account aggregation, vault solutions and, perhaps most importantly, its client portal. The eMoney Advisor personal financial management (PFM) tool (they call it a client site) is seen as possibly the most attractive of the company’s products in the eyes of Fidelity. MyPrivateBanking’s view is that Fidelity’s purchase should probably not be seen as a cherry picking opportunity and that they have plans for the whole product range. That said services like MINT.com or Personal Capital’s financial software are showing that personal finance portals have plenty of potential in the retail segment.

Just what those plans may be is unclear at this stage but the eMoney Advisor purchase has raised concerns among financial advisors that use its products even though Fidelity has promised not to interfere with emX’s integration on the platforms of other custodians such as Charles Schwab and TD Ameritrade. Concerns have also been expressed at the possibility of Fidelity making use of big data on HNWIs’ portfolios available on the eMoney Advisor platform but this raises such serious questions about who really owns that data that we think Fidelity Investments would see this as a highly dangerous strategy.

Although we shall have to wait to see how Fidelity plans to build on its eMoney Advisor acquisition, it is clear that the company is fully aware of the need to accelerate the speed with which it engages with digital technologies to provide more help to investors. MyPrivateBanking believes that, in particular, the new collaborations between Fidelity Institutional and Betterment Institutional, and with LearnVest may be a sign that Fidelity’s focus on providing advice and planning services to the mass affluent and the young via technology is increasing.

The eMoney Advisor deal also sheds an interesting light on the volume of investment going into fintech from venture capital funds. Fidelity is paying a lot more than start up’s funding but it is getting an established revenue stream of at least $30 million a year as well as a well qualified team of 250 people. It seems likely that they have interesting plans for that team as a team but that they will respect what eMoney Advisor has already achieved since it started 15 years ago.

 
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