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Independent wealth managers embrace digital tools
Technology allows MFOs to overcome pandemic-induced disruptions, enhance services and become more efficient
23 Nov 2020 | Tom King

For wealth managers, Covid-19 may have permanently changed the way they interact with their clients. Fortunately for both the global private banks and the independent wealth managers, digital tools have made up for the lack of quality face-to-face time with clients.

A lot has been written about the eye-watering budgets the world’s major banks have ploughed into their digital solutions to fine-tune their wealth management offerings. As far back as 2015, Singapore’s largest lender DBS said it was committed to spending more than S$200 million (US$150 million) to upgrade its technology platforms. A significant slice of that was to go to its wealth division.

With only a fraction of the financial and manpower resources of their bigger peers, independent wealth managers and family offices have been using technology to calibrate their services and make their businesses more efficient.

Veronica Shim, founder and chief executive officer of Singapore-based multi-family office Envysion, believes technological advancement is now beginning to have a huge impact on family offices.

While each MFO has a tailored approach to digitalization, the underlying benefit is that it helps advisers to gain a rounded, clear and accurate view of client portfolios. Digitalizing the end-to-end process also enables a secure, remote, and seamless experience in client onboarding, while ensuring compliance with local regulations.

“We have observed a growing expectation for real-time information so as to drive swifter and sound decisions, and digitizing the company has certainly helped the team in delivering better value to our clients,” says Shim.

For Raffles Family Office CEO Chiman Kwan, technology is an integral and increasingly important part of his firm’s service offering, which encompasses digital dashboards and up-to-date portfolio management capabilities that the ultra high net worth families and financial services companies they interact with expect.

“As we continue to expand our business outside of Singapore, Hong Kong and Taiwan, we are seeing tremendous value in partnering with organizations that provide access to technologies that broaden our client base and range of distribution channels,” Kwan says.

“This includes our collaboration with wealth management technology firm iFast, the other half of our joint venture in mainland China, where web and mobile engagement is key.

Efficient tools

Cem A. Azak, executive chairman and majority shareholder of independent asset manager Crossinvest (Asia), believes that the real digital revolution is just at its nascent stages, yet he says digitalization is already reaching every aspect of life.

Notes Azak: “In our space, maintaining costs is a major factor to success and digital solutions provide the most ideal tools as low-cost and efficient. As such, we are investing in new digital systems for client onboarding, know your client compliance monitoring, client performance and account reporting. We are also investing in state-of-the-art performance visualization solutions that will allow client data from various custodian banks and accounts to be automatically collected and processed at the clients’ fingertips.”

In its recent global wealth report, Boston Consulting Group said it expects the wealth management industry to be reshaped by digital technology, although the wealthiest clients still favour the human touch.

For the independent asset managers and MFOs in Asia, the combination of leveraging digital solutions to control costs and drive efficiencies, while staying close to a limited number of clients, could prove to be the perfect combination.

Envysion’s Shim thinks MFOs that have embraced technology will also find increased efficiency as it enables collaboration with different partners, vendors and third-party providers. For example, software as a service and cloud-based solutions act as a bridge between the MFO and its partners.

“For optimal collaboration with clients, firms can consider automating the workflow for areas such as client onboarding and compliance, document management, order management system, digital signature, and virtual conferencing, so as to add value to advisers and clients. This is a cost-effective solution as it allows MFOs to leverage their existing infrastructure without having to build a digital solution from scratch,” Shim adds.

Some independent wealth managers are not content with just adopting digital solutions from industry experts. Says Crossinvest’s Azak: “We are also building systems in-house to process economic and fundamental data to further enhance our decision-making process. On top of this, we are also sourcing for local digital start-ups to invest in and help them grow.”