The Evolution of WealthTech: Key Platforms Shaping the Future of Digital Wealth Management

Is the Market ready for Premium Digital Banking and New Technologies in the Financial Industry?

With contributions from Andriy Hryshchuk, Senior Investment Analyst at Blackshield Capital

About nine years ago, my partners and I attempted to digitise private banking. We began developing a digital platform for wealth management. At that time, I had over 15 years of experience in asset management and understood that digitisation of these services, and consequently their scaling, was the next evolutionary step. However, we quickly realised that the market was not ready for this. Market analysis and trends indicated this clearly.

Premium digital banking and WealthTech can only develop after FinTech, meaning after a large number of people digitise basic activities: payments, transactions, and transfers. Unfortunately, nine years ago, the level of technology penetration in the financial sector was too low to take the next step.

Time has passed, and much has changed. We have been working on a WealthTech project for over a year now and see that the foundation for this is well-prepared. For instance, in the UK, where we are developing our project in the initial stage, 92% of people use cards for transactions. This creates a basis for cross-selling. The implementation of AI allows for more effective analysis and utilisation of existing data. Software solutions in such conditions can spread without boundaries.

The WealthTech market is just beginning to develop, but strong players are rapidly emerging who manage to effectively combine the most in-demand financial and investment services on a single platform. We have analysed several platforms which, in our opinion, are the most effective today.

Compound is a powerful wealth management platform that assists its clients with financial, tax, pension, estate, and investment planning. Compound advisors also create a dynamic multi-year forecast of cash flows for future incomes and expenses. These forecasts can be modelled under different scenarios following critical business decisions. Compound also allows all necessary documents related to your wealth to be stored in one place and provides a concierge service that gives the client access to a personal financial assistant. On the downside, this app lacks educational content in any form and does not allow money transfers. Thus, in terms of functionality, the main focus is more on comprehensive planning rather than lifestyle solutions.

Parthean is a universal app designed to create personalised financial plans with an AI coach for expense management, allowing users to manage money in one place and take out and repay loans, with fee-free money transfers. It also enables users to view "statistics" across all accounts over a certain period. This feature greatly simplifies life for people with multiple income sources. In addition to financial management, Parthean offers educational content in the form of personalised news from AI advisors, who also teach users how to use the app most effectively to simplify the process of managing their wealth.

Farther is a wealth management platform offering a comprehensive set of features, including personalised financial advice from experienced advisors based on the client’s personal information and portfolio modelling with targeted asset allocation. This allows clients to access ETFs that reflect their personal preferences. Additionally, Farther offers educational content, mainly about investing and the economy, but also publishes personal company news. The feature Farther lacks is financial planning, as the main focus of the app is on ETFs and portfolio modelling rather than reviewing and analysing clients’ overall financial situation.

In addition to client-focused platforms, many digital tools are emerging in the WealthTech industry to assist financial advisors. In the UK, the most successful platforms, in our opinion, are True Potential, abrdn Elevate, and Parmenion.

True Potential is a fully integrated wealth management platform currently working with one in five financial advisors in the UK. The platform offers various stocks, ETFs, mutual funds, bonds, as well as pension accounts, a general investment account, and ISAs. Additionally, the platform provides quick risk assessment tests for clients, data reporting tools, and unlimited document storage, covering most functional needs of financial advisors. According to reviews, the platform is quite easy to use but is more expensive than average, as it includes a wide range of services and an additional secure client site where they can track their investments against their goals and view portfolio assessments around the clock.

abrdn Elevate is one of the largest universal wealth management platforms, supporting a wide range of planning: tax and investment management, as well as estate planning. It has a broad spectrum of assessment tools for pension expenses, investment risks, and others, as well as comprehensive reporting options. Like the previous platform, it provides access to investment funds, stocks, ETFs, and investment trusts. On the downside, there is a significantly smaller selection of investment opportunities, but it can be used at all stages of financial advisors’ work.

Parmenion is a much smaller wealth management platform aimed at advisors who want to create and manage centralised investment propositions (CIPs – a coherent investment strategy or set of strategies with predefined asset allocation models that can be applied to multiple clients), thus offering a much smaller range of options: access only to UK and offshore funds, excluding bonds, ETFs, and stocks. Regarding risk assessment, Parmenion collaborates with Dynamic Planner, helping to accurately match portfolios with predefined asset allocation models. Finally, Parmenion provides a reporting dashboard that displays accurate and meaningful data in a visually convenient format. Despite still being in development, Parmenion won the 2023 Moneyfacts’ Best Wrap/Platform Award, mainly due to its clear value proposition and modern approach.

Overall, the WealthTech app market has a lot to offer. However, current platforms do not yet cover the full spectrum of financial and related services. They remain fragmented, even in digital format. To meet all their needs and demands, such as analytics, private banking, investing, tax planning, lifestyle services, and more, end clients or financial advisors still have to use various apps. Although these apps are modern and high-quality, they are not yet able to comprehensively meet all client needs.

The next stage in the development of the WealthTech industry is the creation of convenient comprehensive platforms that provide clients with access to a wide range of services related to financial management, investing, legal matters, and lifestyle services. These platforms should be intuitive, offer a high level of service, and allow all issues to be resolved with a few clicks.

In an era of rapid technological development and changing client needs, those companies that can effectively integrate innovative solutions and offer clients a comprehensive approach will succeed. WealthTech is not just a trendy buzzword but a necessity that allows for a new level of service and efficiency in the financial industry.