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How Financial Institutions Are Stepping Up Their Game in Wealth Management

A moment of ‘weakness’ turned into an opportunity

Financial technology startups can undoubtedly be credited with accelerating the pace of innovation adoption in the financial services industry, and wealth management, in particular. As fairly noted by Reuters, companies like Betterment and Wealthfront have made robo-advisors, which provide automated investment advice to clients through web-based platforms, popular investing options, with which traditional brokerages rushed to compete, appreciating the opportunity to serve clients at lower costs enabled by technology.

To put things into perspective – fees charged by well-known players like mentioned earlier Betterment, Wealthfront, Motif, and Folio, among others, range between 15 to 35 basis points of AUM, while traditional wealth management firms and financial advisers charge 1% of AUM or higher. The minimum investment requirements for getting into the game have played a significant role in the rapid expansion of the competition. Technology startup ...

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