The WEALTHTECH Book

Digital Asset Management in 2020 – Seven Theses

By Ralf Heim

Co-CEO, Fincite GmbH

“Financial products are sold, not bought.” This fundamental belief is widespread within the financial industry. Many surveys support this fact. They show that the average customer, if asked on the street, neither knows the performance nor the costs of his investments. Do we believe that new digital applications (so-called robo-advisors), low-cost financial products (such as exchange-traded funds (ETFs)) and upcoming regulatory requirements will change the way we invest? If so, how will these applications look and how will this change the market structure of the asset management industry? We will explore these questions with seven theses.

Speaking on stage three years ago, we often received one question: “How many robo-advisors (by banks or start-ups) will enter the market?” We often wondered about the surprise of the audience as we answered: “We believe everyone who sells financial products offline, might offer them online. It’s like websites in the 1990s.” Today, many announcements indicate that most banks will provide a robo-advisor soon. For the sake of simplicity, we will use the term robo-advisor for any digital application that supports the customer in their investment journey – no matter if provided by a start-up or a bank, and disregarding whether it matches the regulatory term “investment advice”. Furthermore, when we speak of banks, the same might apply for insurers, asset managers or ...