Wealth Technology

Dear Clients and Friends:

Please find here our latest REPORT on the WealthTech sector.

Waves of tech-enabled disruption over the last decade couldn’t have prepared those in the financial planning and advisory business for the tsunami we have seen over the last few months. The impact of COVID-19 has been profound across the globe. 

While financial advisors have not escaped the impact of this pandemic, those who have embraced technology as an integral part of the investment process seem to have fared better than most of us expected. UBS, for instance, reported that client log-ins for its Americas wealth management business soared 26% in March compared to December, according to the firm’s first-quarter earnings report. Wealthfront and Betterment (M&A deal – with Francisco Partners), the leading digital advice firms, reported double-digit percent increases in account sign-ups.

Hybrid digital advice models such as JP Morgan’s You Invest Platform that pair advisors with digital clients are being tested as they have never been tested before – and they appear to be holding up well. JPMorgan must be pleased that it had decided early to expand its You Invest platform.

The trend towards increasing use of technology bodes well for third-party technology solutions that help advisors to analyze performance, administer portfolios, and communicate with clients (see our recently announced STRANDS / CRIF transaction with its PFM communication tool). These solutions can help reduce operational burdens and allow financial advisors to more effectively prospect and manage existing client relationships even during a global lock down.

As you will see in our latest REPORT, m&a values in the WealthTech industry took a hit early – along with the rest of the market. But, the sector has begun to recover. Our latest report focuses on what this current dislocation means in the short term, opportunities it offers, as well as on:

• The need for continued focus on cybersecurity; and  
• The many opportunities for consolidation in the sector.

Please feel free to reach out, we would be pleased to share our take on what we are witnessing in the markets and how that may relate to your platform.

Regards,

Max