The 21st century brought a new wave of different kinds of digital media and they have become increasingly popular. More and more people now use the internet daily with a lot of activities and transactions being done over the internet using different devices like computers, tablets, smartphones, etc.
Businesses now have web and mobile apps that make it easy for people to transact over the internet. This has become an everyday experience for most people.
Financial services are not left out of all these, as financial institutions and businesses now have a variety of tools to make investments and transactions very easy, attractive, and accessible.
These come with many advantages for both the businesses and their consumers alike as they can leverage on technology to reach a wider audience of customers, engage with them, pass information, advice and provide the much-needed services to them.
On the part of the consumers, it has made accessibility to various services open and available. This has also resulted in access to more investment opportunities.
Part of this digital revolution in the financial services sector is digital wealth management services.
#1. What is Wealth Management?
This is a financial service geared towards investment and aimed mostly at affluent clients. It starts with a process where the company gets the client’s information and financial goals and then renders services tailored to help them achieve those goals. This is usually done by wealth advisors with these advisors meeting physically with their clients.
You can read about this here.
These days, advisors still meet with clients but a new trend in Fintech now involves using online and digital platforms to cater to more clients and those hitherto that may not be as affluent but still need to invest.
This includes using Robo-advisors and algorithms that are based on consumer information, data, and risk aversions that are leveraged to provide directly to them digital financial services such as investments and advice.
These services can include asset allocation, account aggregation, risk assessments, portfolio selection, stock investments, and other financial services.
#2. What Does Wealth Management Encompass?
Much more than a piece of investment advice, wealth management involves everything about a person’s finances. It involves managing their money and planning for their present and future needs through investments.
Most digital wealth management platforms come with different investment and planning tools that allow you to track your cash flow including your income and expenses from the different accounts you own.
You can set the goals you like to achieve and add more to your savings or investment. You can budget and you will get a summary of your spending so you know what you are spending your money on and what is more, it enables you to know when your bills are due for payment.
Another option this gives to you is that you can know the status of your investments in real-time. You know which is doing well and the ones that are not. You can plan for retirement and other important life events and it will help you know the adjustments you need to make.
Also, digital wealth tools help you understand where you stand when it comes to your net worth as you are easily able to see your assets and liabilities. They also help reduce your tax and also to minimize tax liabilities.
The beauty of digital wealth platforms is that you do a lot of stuff by yourself and when you need help and advice, you can reach out to your advisors to get it.
This may be dependent though on the version of the software you are running as there are free and also paid versions and how much of investment you make.
#3. Tips on Choosing a Digital Financial Advisor
3.1 Understand the Various Types Available
While there are strictly Robo-advisers that offer simplified and low-cost investment options whereby you answer a series of questions and with this, software algorithms help to build you a profile and portfolio with little or no human intervention, there are also online advisers that provide virtual access to humans. These are a step up to Robo-advisers as it is mostly automated but has the added advantage of offering access to humans.
Entry and registration fees for Robo-advisers are much lower and they might not have account minimums, allowing you to invest even with small amounts. Entry fees for online advisors are higher but they will provide you with a more comprehensive service.
3.2 Cost Level
Before now wealth management services were quite expensive. Not that this has changed, but there are many more options available to virtually anyone. Before committing to an advisor, understand what the associated cost is. Know if you will be paying a flat fee, an annual fee, or a percentage and check how high this is to be sure that it works for you.
3.3 Research the Platform
Checking out reviews about a wealth management platform before deciding to go with them is important. For example, Personal Capital is a digital platform that offers both free and paid wealth management services.
Before deciding to go with them, you should read what others have to say about it. You can find one such review here: https://tradingreview.net/personal-capital-review/.
Check out their experience, records, and what they have to offer and see how they have performed. You can also ask around and see if there are people like your colleagues and friends who know about them or use their services.
There is no excuse not to invest or be able to track your spending with a variety of options and tools available for you to do so. It might have been tougher before now but there are more and more companies offering this at cheaper rates and with increased accessibility.
Start by considering your options and choose the platform that is best for you.