The wealth management industry stands at a pivotal crossroads, with a hybrid engagement approach being the clear path forward. The integration of physical and digital capabilities has become crucial as the industry navigates the impacts of digital transformation, heightened client expectations, and evolving competition.
“Lighthouse Canton is increasingly seeing its wealth management clients desire a hybrid model where they prefer a combination of traditional, high-touch client service with advanced digital tools to deliver personalised, efficient, and ubiquitous financial advisory,” Shilpi Chowdhary the group CEO at Lighthouse Canton told Lighthouse IDEAs: Views and Insights.
Keeping this in mind, Lighthouse Canton is investing significant resources in using technology to deliver the most comprehensive suite of solutions to its clients.
Chowdhary elaborated with an example.
“Currently, most service providers offer clients two options: choose pre-built model portfolios or consult with an investment committee, which can take days to produce a proposal.” He added, “With our own proprietary technology, Lighthouse Canton is generating personalised portfolio recommendations in minutes, revolutionising the market with swift and tailored investment experiences.”
Lighthouse Canton is also actively looking to develop technology to help clients access conversational portfolios. Artificial intelligence and chatbots are just some of the avenues it is currently exploring to provide relationship managers and clients with real-time, interactive, and bespoke information about their investment portfolios.
“We want to eliminate information asymmetry from portfolio management. We feel this will greatly help clients with more responsive and convenient services,” explained Chowdhary.
Consolidation Services
Wealthy clients are also increasingly demanding accurate “consolidation services” through technology, to streamline decision-making and ensure their portfolios align with their family goals. As family office assets grow and cross-generational needs become more complex, the importance of consolidation services intensifies. Automation of asset aggregation and consolidation is highly desirable, enhancing decision-making capabilities and refining day-to-day wealth management.
This is an area where Lighthouse Canton sees active demand from its clients and has made this access possible for them, using its in-house technology solutions.
“Most of our clients have accounts with two or three different banks, each with different reporting standards,” Chowdhary explained. This makes it difficult to have a unified view of their consolidated investments.
To address this, Lighthouse Canton has built connectivity with several banks. Daily data feeds are received on every client's portfolio and positions from all banks, this data is then normalised by the system, discrepancies reconciled, and a unified view of all investments is produced on a single page.
“Clients can easily see the percentage of wealth in each bank, total equities held, performance across all banks, and any overlapping exposures. This consolidated view allows for institutional-grade analytics, including stress tests on a consolidated basis,” Chowdhary added.
Democratising Wealth
However, it’s not just client demand driving the digital transformation in wealth management. By leveraging tech-driven solutions, service providers in Asia Pacific can tap into the rapidly growing industry, expanding services to more customers amidst the region's massive wealth surge.
The numbers tell the story. The Asia Pacific wealth management industry’s assets under management are expected to expand from a substantial USD 18.50 trillion in 2023 to an impressive USD 33.00 trillion by 2028 - a robust compound annual growth rate (CAGR) of 12.27% during the forecast period, according to a newly published report by Research and Markets.
The way wealth is distributed in Asia is also extremely interesting and what Accenture defines as Asia’s wealth barbell.
The research above shows that affluent individuals with USD100k-$1m of assets comprise by far the largest proportion—some 854m people, or nearly 99% of the total wealth segment available—and control 75% of the assets available, worth USD163.5trn. 10% fall in the USD 1-5m segment and another 10% in the USD 30m+ segment.
The approach for each of these segments must be different if the wealth management industry has to provide bespoke services to all of them.
This is again where technology plays an important role.
Again, Chowdhary explained with an example. “Clients today demand greater accessibility to financial products, some of which have high minimum investment thresholds. Lighthouse Canton pools resources from multiple clients reducing the minimum investment size required by each investor and combining it with innovative delivery solutions to enhance accessibility and democratise the reach of these financial products.”
The next generation wealthy are also more tech-savvy and sometimes prefer to have greater control over their portfolio, again something that requires a digital-first approach, backed by solid relationships.
“A self-serve model is also made available to clients to manage their portfolio through an app if they prefer that,” shared Chowdhary.
“Something we are trialing now, for instance, is when our Chief Investment Officer makes a stock recommendation, clients receive a notification through the app, allowing them to review and act on the recommendation immediately. If there are significant changes, such as a stock falling 20%, the app will alert them and provide recommended actions from our investment team,” he added.
Overall the burgeoning wealth management industry in Asia–Pacific holds great possibilities and a robust wealth tech approach is needed to unlock this and expand the reach of “advice for all” a reality.
Also Read: From stability to agility, what Asia’s wealthy investors seek
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