Investment advisory business is undergoing a revolutionary change with respect to its service of delivering financial advice to its investors. Earlier, there wasn’t much transparency in the services provided. But that is not the case anymore.
Now investment advisory companies are implementing more transparent and professional method of providing services. Such kind of changes are helping in raising the standard of companies making them more trustworthy and investor friendly. However, there still remains wide scope for financial advisors and wealth management firms to improve their services.
Today, there are several investment options that are available to the investor. The need of accumulating wealth by investing in the right investment vehicle leaves the investor bewildered. Thus, when investors’ expectation increases there arises a need for investment advisors who possess a vast array of investment knowledge.
The Age of Robo-Advisors-
In recent times, robo-advisories have sprung up in big numbers and can be considered as a breakthrough in wealth management services. These kinds of services allow minimal human intervention while simultaneously catering to wide range of audience. Robo-advisors provide digital financial advice that is based on computer algorithms and mathematical rules.
Traditional investment advisers saw robo advisers as a threat till recently. Today, that’s no longer the case. Digital platforms driven by powerful tools, research are an important part of modern investment advisory. The situation has flipped significantly with now, customer engagement is driven by efficiency, discipline and connect brought in by such digital tools.
A building of Digital Platform-
In today’s scenario, investment firms are heavily laying emphasis on advice-centric investment ecosystem that is well-connected with technology-enabled digital delivery tools for enhanced investor experience. Development of sophisticated approaches that link portfolio construction and financial planning and managing it into a single end-to-end process.
Bright Future for Investment Advisory Firms
The future of investment advisors looks bright as the need for investors to seek professional help becomes sort of mandatory. The next phase of investment advisory firms would cover customized investment solutions for all categories of professionals through low-cost solutions, innovative client engagement models and focus on customized financial aspirations. Harnessing of technology in the form of automating several manual processes will help in reducing time constraint for management and development of a personal interface between the advisor and the investor.
Who Can Lag Behind?
Investment firms that fail to deploy digital investment advisory platform to their clients will probably lag behind. Also, active managers who fail to deliver distinguished performance may also be left behind.
It is favorable time for investors to seek professional investment help as the services and processes have become more transparent, personalized and automated. Changes in investment advisory business will surely help in inculcating discipline in investment and enhance service. Understanding investor’s need should be of prime importance to any kind of investment advisor.
Based on his expectations, an investment strategy should be devised. Innovative portfolio construction strategy should be implemented that takes full advantage of exchange-traded funds and passive strategy.