Fintech on Friday: The new era of portfolio management toolkits

Core to the proposition and business models of many wealth management firms is their ability to manage money. The role of technology in that process has now come right to the fore and, second, the ability of any wealth manager to build, analyse and report on that service is becoming not only a real means of differentiation in terms of their ability to win, service and retain clients, but also key to their overall market position in a performance-centric world.

Managing money for private clients is becoming a more measured, sophisticated and expectant environment. We have entered an era where clients want access to broader investment options, where they expect their advisers to not only have access to that but also understand  their complex needs and how best to meet them.

When the client gets this type of experience in other areas of their lives such as retail, travel and health, they want it in wealth too. The time for delivery of the new investment marketplace model is here.

An area where we see considerable ongoing development of that new model of wealth management is in what we call portfolio build, analysis and reporting. Whether integrated within existing systems such as core banking or portfolio management or independent of those, there is a growing range of technology tools available that support wealth managers in their process of building, analysing and reporting on the portfolios they manage for private clients.

Portfolio build

The need is for better and more insightful data, indicators, accessible intelligence around asset classes or product types and access to more and diverse products. 

The tools to support this increasingly exist and new ones are coming to market with considerable frequency. Consider alternative investment marketplaces and platforms like Artivest, AtomInvest, Delio or Moonfare and cash management platforms like Cashwerkz, Deposit Solutions, Flagstone or Raisin. 

Or look at many of the new data sources and others that compile intelligence around certain products like IntoTheBlock from Spain which is all about crypto market intelligence or Sentifi from Switzerland which uses crowd and social media sources to provide intelligence to investors. 

Other firms in these areas to look at would include 280 CapMarkets, AlphaSense, BankerBay, HUBX, Ionic Information and more. 

These resources simply did not exist before, but they are helping wealth managers build portfolios in a more seamless way as well as building in analytics, reporting and workflow to make the process simpler. 

Analysis and reporting

In the area of portfolio analysis, with computing power, the Cloud and digital tools to aid delivery and access, the flow of new and improved tools seems continual. The wealth manager needs asset allocation toolkits, asset modeling, access to algorithms and tools to build analytics, peer analytics and risk management. 

Look at Trendrating from Switzerland, which uses pattern recognition technology to analyse a large set of data and present that in a digital front-end, or another Swiss-based firm, Tindeco Financial Services, which works with its engineers to create far more personalised portfolios and analysis for its clients. Then there is UK-headquartered ALPIMA, which presents portfolio data, insights and analysis in a far more engaging way to support the sales, engagement and effectiveness processes of wealth managers. 

Other firms in these areas to look at would include aixigo, FactSet, Investment Metrics, kwanti, Masttro, Moody’s Analytics and Preqin. 

We are now in a world where there is a far richer set of functionalities available. There is also a broader means to access these resources, for instance, through the more traditional core banking and portfolio management systems that might integrate them. There are also a growing number of API-based and other types of marketplace, while the increased levels of specialisation mean there are specific tools available which can be adopted individually.

These and similar tools will play a significant role in the efficient and intelligent management of private client portfolios. How do wealth managers outperform, how do they justify their fees, how do they acquire new clients and retain existing clients? A more sophisticated toolkit including tools that support the portfolio build, analysis and reporting process will be central.  

Stephen Wall is co-founder of The Wealth Mosaic