Egypt's current account gap narrows, but overall BoP records deficit    Egypt's PM reviews debt reduction strategy, eyes more private investment    Egypt hosts international neurosurgery conference to drive medical innovation    Egypt, India discuss expanding industrial, investment partnerships    World Bank proposes Egypt join new global health initiative    Egypt's EDA discusses Johnson & Johnson's plans to expand investment in local pharmaceutical sector    I won't trade my identity to please market: Douzi    Sisi sends letter to Nigerian president affirming strategic ties    Egypt welcomes 25-nation statement urging end to Gaza war    Egypt, Senegal sign pharma MoU to unify regulatory standards    Egyptian pound ticks down in early Tuesday trading    Famine kills more Gaza children as Israel tightens siege amid global outrage    Kuwait's Crown Prince, Egyptian minister discuss strengthening cooperation    Egyptian Drug Authority discusses plans for joint pharmaceutical plant in Zambia    Egypt's FM seeks deeper economic, security ties on five-nation West Africa tour    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt foils terrorist plot, kills two militants linked to Hasm group    Egypt, Somalia discuss closer environmental cooperation    Egypt exports 175K tons of food in one week    Giza Pyramids' interior lighting updated with new LED system    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Korea Culture Week in Egypt to blend K-Pop with traditional arts    Egypt, Uruguay eager to expand trade across key sectors    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



The conduct of code: how digital disruption is changing wealth management
Published in Daily News Egypt on 04 - 03 - 2020

Negative interest rates, inflated asset valuations, and fee compression do not generally make for a happy wealth manager, but these headwinds are at least spurring an efficiency drive across the industry.
One of the strongest investment themes to have emerged from the World Economic Forum in Davos last month was the challenge of choice facing wealth managers today — that is to say where they should deploy their clients' funds.
While squeezed returns across equity and debt markets have led some money managers to seek alpha in other sectors – such as infrastructure, real estate and private equity – it has also forced the industry to look inwards at itself.
As in other sectors where the digital disruption wave has hit, there is a certain amount of acceptance that the industry needs in order to grasp the opportunity that technology offers; not only to solve some operational challenges faced by wealth managers themselves, but to offer a better and more nimble service to clients.
Technology is at the heart of the changes we are now seeing in the way money is managed, while tech is moving from the back office world of administration to the very front of the client interface. It is not just cost analysis that is driving the trend — it is also increasingly client-driven.
The digital economy has brought about new standards in terms of customer experience that are essential for those involved in wealth and wealth management.
To some extent the changes underway in our industry are mirroring similar developments in the world of trading where increasingly sophisticated algorithms compete to execute buy and sell orders at speeds that are beyond human comprehension.
But they are also impacting the way wealth managers interact with their clients. This is especially true of the millennial generation nourished by digital experiences. Over the next 20 years, the number of millennials swelling the ranks of wealth management clients will increase significantly. They are not only less suspicious of automation and other forms of wealth tech, but actively embrace it. For them, interacting with their adviser over WhatsApp might be preferable to a personal visit and having the ability to actively manage their portfolio on their phone is just as important.
Some wealth management firms have already acknowledged the potential disconnect between older advisers rooted in the old ways of the industry and a younger generation of clients seeking a different kind of experience.
So-called Robo-advisers, the financial stock picking algorithms that conjure up images of a pinstripe suit clad C-3PO, are undoubtedly on the rise.
Depending on which estimates you want to believe, they currently manage anything between $300bn to $500bn in assets, but their growth has not been anywhere as rapid as some other investment vehicles such as exchange traded funds.
The steady rather than stellar growth of such platforms in recent years suggests that choosing a human or algorithm-based approach to investing does not really need to be a binary decision.
Successful wealth managers will be able to blend the efficiencies and savings offered by a technology-driven approach with the personal touch that many clients still demand.
The deployment of digital tools should allow wealth managers to free up time so that they can focus on services with higher added value.
No two clients will want exactly the same investment advice offering, so successful advisers will exploit technology to deliver a pick and mix approach tailored to the needs of the individual.
While machine learning will inevitably broaden the range of investment advice tasks that emerging algorithms can deliver, there remains much that is still beyond their current wit.
All these elements should lead to a serious rethinking of the role of face-to-face advisers. Face-to-face is indeed still a prerequisite today to build trust, even to initiate the relationship. However, the fact remains that the proliferation of digital features and services, the rise in the number of remote interactions, may end up undermining the usefulness of the advisor, particularly with a more demanding millennial. The challenge therefore lies in the ability of wealth managers to reposition the physical component of their contact points.
The applications born of new technologies and initially destined for clients, must therefore be just as much useful to their advisers, helping them optimise the efficiency and productivity of appointments. That could be anything from taxation mitigation to estate planning or simply the retelling of an anecdote that better connects with a client in a way that code cannot, ultimately sealing the deal.
Francois R. Farjallah – Global Head of the Middle East & Africa for Indosuez Wealth Management


Clic here to read the story from its source.