Natalie Monko Lead Project Manager

    Wealth Management Technology Solutions: Understand the Market of Wealthtech

    The wealth tech sector is experiencing rapid growth with the widespread adoption of mobile and web apps that allow financial institutions to address end-user needs, automate routine tasks, and increase efficiency. CB Insights informs that wealth tech organizations managed to attract a record $5.6 billion during the first three months of 2021, exceeding the 2020’s total year-end funding of $5.2 billion. 

    Furthermore, a total of 86 wealth tech deals were closed in this time, which became the highest level of deal activity in a single quarter for the industry. At the moment, wealth management technology solutions are among the key trends in the field. 

    In this article, software experts at Surf have described the main types of wealth management software for you to do benchmarking and get ideas for a project. But first, let’s take a brief look at the state of wealth management in fintech.

    wealth tech categories
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    The state of wealth management technology industry in 2021

    Since the coronavirus pandemic forced governments to impose lockdowns and social distancing, the demand for digital wealth tech services has considerably increased. According to Business Insider, 77% of financial US and Canadian advisors reported losing their business due to the lack of appropriate tools to interact with customers during the outbreak. 

    Experts also revealed that now 75% of wealth managers across the globe consider digital as a priority. Aiming to meet changing consumer habits and gain a competitive advantage, fintech organizations are actively investing in wealth technological startups and initiatives. 

    According to Grand View Research, the worldwide wealth management software market is projected to rise from $3.31 billion in 2020 to $9.14 billion by 2028, progressing at a compound annual growth rate (CAGR) of 13.5%. 

    Grandviewresearch statistics

    Analysts at CB Insights inform that wealth management software tools raised $712 million across 23 deals during the first quarter of 2021. The major market driver is a continuously increasing number of High-Net-Worth (HNW) individuals who need to use innovative financial advisory software. 

    Now, let’s pass on the principal categories of wealth management technology solutions.

    Top 5 wealth management technology solutions to consider

    1. Robo-advisors

    Robo-advisors are software programs that use machine learning to offer financial management and control services with little or no human intervention. Operating according to specific algorithms, robo-advisors collect and analyze user data (for instance, goals, income level, risk tolerance) to automatically take investment decisions and provide meaningful recommendations. 

    The most advanced digital advice platforms enable customers to access international markets, open and replenish accounts, as well as monitor investment portfolios in real time. A true-life example of such a wealth management solution is an advisor delivered by Just2Trade, an online brokerage company.

    robo advisors evolution

    At the moment, the popularity of robo-advisors is increasing at a rapid pace. Insider Intelligence reports that the number of client assets managed by automated investment advisors will reach $4.6 trillion by 2022. 

    By creating robo-advisors, it is possible to automate processes such as request processing, financial planning, and customer service. Thanks to this, organizations improve user satisfaction and employee productivity. Relieved from performing routine activities like investment portfolio analysis and surveys of client needs, in-house professionals can devote themselves to other revenue-generating activities. 

    2. Investment portfolio management apps

    Investment portfolio management software is among the main types of wealth management digital solutions. This software allows for tracking financial assets (for example, stocks, bonds, exchange-traded funds (ETFs), futures), analyzing performance, and optimizing resource allocation via a single platform. 

    Applications of this kind contain features like a data visualization dashboard and reporting, which helps manage multiple portfolios and faster take investment decisions. Let’s take a look at real-life projects. 

    Personal Capital, founded in 2009, is a technology company that has an industry-leading wealth management app offering advisory services. The platform allows clients to classify investments between different accounts, monitor investment performance, compare returns, and visualize data. Providing investors with wealth management strategies, the system currently has more than 2.5 million users. As of 2021, Personal Capital has raised $265.3 million. 

    Following the trends, Surf is ready to offer a concept of an investment app based on the best industry-specific practices
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    3. Robo retirement solutions

    Building a retirement portfolio may be a difficult and time-consuming task for not only entry-level but dedicated investors. However, now the fintech environment is witnessing a considerable increase in wealth management technology solutions for retirees. Thanks to this, organizations facilitate access to professional financial advisory and management services, which allows for improving customer service and boosting overall efficiency. 

    For example, United Income is a robo-advisor platform that provides retirees with a range of options, including health insurance guidance, tax optimization, cash flow management, and social security recommendations. With the system, users can keep track of their investments and manage funds easier. Founded in 2016, United Income has raised $15.9 million over 2 rounds.

    robo-advisor example

    4. Micro-investment software

    Micro-investment applications are among the top wealth management technology solutions. Using this software, customers can begin investing small sums of money, which is especially suited for entry-level investors and people who have a limited budget. 

    When users connect payment cards to accounts, their purchases are automatically rounded up while the remaining amount is invested in financial assets. It is noteworthy that micro-investment apps generally don’t withdraw commission from users. In most cases, wealth management software vendors generate profit by charging a subscription fee.

    Let’s have a look at a real-life example. Established in 2017, Roobee is an investment application that utilizes artificial intelligence to assist non-professional and private investors in creating diversified portfolios. 

    Roobee functionality example

    Representing a blockchain-based platform, Roobee enables users to invest wisely, starting from $10 in stocks, ETFs, cryptocurrencies, startups, Pre-IPOs, real estate, and other options. In 2018, Roobee managed to attract $4.5 million during the pre-seed funding round.

    5. Online brokerage services

    The primary objective of digital brokerage software is to bring together customers, brokers, insurers, and policyholders. By using cutting-edge technologies, such as machine learning (ML) and big data analytics, digital brokerage systems enable users to automate data analysis, investment portfolio management, and decision-making processes. 

    Considering true-life examples, eToro is a software platform for multi-asset brokerage and social trading that lets customers trade cryptocurrencies, commodities, and other assets. Founded in 2007, eToro employs artificial intelligence (AI) to streamline operations and deliver a better user experience. By now, this fintech app has raised $272.7 million.

    Another project is Kapitall is a digital stock broker that enables users to invest in stocks and funds, share ideas with other members, create either virtual or real brokerage portfolios. Launched in 2008, this wealth management technology solution makes use of the gaming experience to improve customer engagement. At the moment, Kaitall serves more than 170,000 users. According to Crunchbase, Kapitall has attracted $20.3 million over 2 rounds.

    Kapital app screen

    Final words

    With technologies taking the center stage, wealth management digital solutions are being widely introduced in the financial industry. Striving to meet changing consumer preferences, companies are building mobile and web applications that allow users to create and manage investment portfolios, receive expert guidance, monitor performance, and generate profit. 

    To choose a type of system for launching a wealth tech startup, you need to do market research and conduct competitor analysis. It is also important to identify the target audience, involving their needs and expectations.
    If you aim to make a wealth management technology solution, you are welcome to reach our team via [email protected] or a contact form. Our professionals will get back to you soon and help you address existing issues.