WealthTech – Business as Unusual

By Nael Shahbaz

Wealth Manager, SAMT AG

The WealthTech sector is going through a rapid development phase, triggered by changing market conditions, new regulations and customer demands.

WealthTech is redefining the way people invest their money. The year 2017 was tough for robo-advisors, as the race to lower fees continued. However, changing business models, competition against mutual funds and the implications of RegTech have made the business quite unusual.

The Attraction for High-Net-Worth Individuals

It is a myth that only millennials or low-net-worth individuals (LNWIs) are interested in robo-advisors. Robos primarily targeted millennials back in 2008, but things have changed since then. Today, financial firms are recognizing the demand among high-net-worth individuals (HNWIs) and baby boomers.

Typical robo-advisors offer core investment, but HNWIs seek more than just passive ETF offerings; they need to secure and diversify their portfolios through active management and hedging. SAMT AG (a Swiss wealth management company), for example, has developed robo-advisors that provide “sophisticated hedging” with a core–satellite method, employing various managed futures strategies in addition to the ETF core.

At the end of 2017, wealthy investors were shifting their interest towards a mix of active and passive investment. The market was filled to the brim with passive investments; as soon as it corrects, profits will be very difficult to earn ...

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