Retail platforms are widening their product offerings and are also integrating with other entities.

The wealth management industry in India has evolved a lot in the last decade as far as regulations and technology are concerned. On one hand, we have tech platforms offering retail-oriented products such as mutual funds, equity broking, and deposits to the very large retail customer base. Here technology and standardization have disrupted the traditional models of business and made them more accessible. On the other hand, wealth management firms offering services and products to HNI and UHNI are evolving to create digital platforms which should be very flexible and can give a customized experience to this segment to fulfil their unique needs. Here firms are trying to meet expectations that have changed due to changes in demography, approach to wealth management, and digital ecosystem.

Retail platforms are widening their product offerings and are also integrating with other entities such as EPF, NPS, banking, etc., to make it a one-stop solution for wealth. Some of them are moving to solve other next-level challenges such as advisory. Robo-advisory is a very logical step in this direction to create an advisory very affordable and non-biased. However, this is where the conflict starts with non-retail business.

While meeting all the above tech-based transactional and reporting capabilities, HNI and UHNIs are expecting a transparent decision-making process based on data and analytics. With the unique requirements of each client and hundreds of options to juggle with, it is feasible only with the support of suitable tech-based tools. Wealth managers and the advisory team will need such tools to quickly create a view that will help in decision-making.

Another challenge is to ensure adherence to the firm’s advisory standard across geographies and all the time. Continuous monitoring of stated investment mandate is not very difficult, firms and systems both are evolving in this space very rapidly. The portfolio construction process and market movement can be monitored by systems and necessary alerts can be given by the system to seek human intervention. This may lead to a change in the client’s approach to wealth management and disruption in the industry. In the future firms and wealth managers may get compensated for objective-driven and/or goal-driven investments where outcomes can be monitored.

Apart from these two, another challenging task firms have taken up is to convince product providers to ready for the digital ecosystem. Providers such as brokers, AMCs, banks, etc., have standardized their processes for retail clients and have developed APIs to support all types of transactions. But for the unique needs of high-net-worth clients, many product providers including banks are not yet completely digitized starting from onboarding to transaction. Integrating with all providers is another big scope for the next level of digitization.

Here, it is worth noting that many fintech and wealthtech platforms have emerged that are focused on offering niche solutions to long-term investor problems around product knowledge, right fitment basis financial goals, and risk-reward matrix and performance reporting. The current millennial generation has loads of information available at their fingertips and wants to look at multiple options before deciding. A digital platform like a mobile app would be a perfect fit for these investors as it could encompass information on global investment options, intelligence on varied asset classes, do-it-yourself videos, and all of this can be provided in regional languages as well.

India has recently launched an account aggregator model which enables customers/investors to share their private and confidential financial data across the entire spectrum of assets and liabilities with service providers. This tool will be the next big lever of growth for wealth management firms just like UPI revolutionized the entire payments ecosystem for the country. This opens the doors for fully personalized digital solutions to be offered to investors in a transparent, seamless, user-friendly, and zero-to-low-cost fashion. It will also address issues around data privacy and identity theft which can scar an individual’s credit score for no mistake of his. This data can be leveraged using AI/ML and vast data analytical tools to provide customized solutions basis the investor requirements. A robust dashboard can also be built to show all important details regarding the different products invested in like asset class type, annualized returns, applicable tax rates, holding period to determine short/long term, deviation from strategic asset allocation, etc.

Digital platforms can also be deployed efficiently to ease the operational, reporting, compliance, legal and regulatory aspects through the entire financial journey of the investor. This will not only reduce expenses but also help avoid errors in filling basic information like KYC, ensure on-time filings and registrations, and timely payments and receipts.