Like most major industries, the financial sector is undergoing a significant shift. Retail banking is being revolutionized via new product solutions and brands such as Revolut, N24 in the retail space and Charles Schwab in brokerage business. For retail it is all about streamlining the account setup process to a few taps of your screen, and thereby removing the need to ever step into a branch, compared to reducing trading costs to zero when it comes to brokers.

Wealth management is experiencing something similar; however, we expect it to undergo a different evolution. Once we fully automate and digitize the advice process, the personal relationship between the client and its wealth manager will remain fundamental, as it is built on trust and reliability which remains a crucial part for long term capital appreciation in clients’ portfolios. We believe that the software and products which we are developing enhances the advisor’s services and the client's engagement but does not remove their function. 

Over our 30 years of operation Avaloq has continuously reviewed our mission so that we remain future-ready leaders within the industry. We achieve this by incorporating five beliefs, which are built on data and the wider macroeconomic situation. These beliefs are, digitalization, cloud, outsourcing, democratization of wealth, and data is king.

In this chapter we’ll focus on one belief: the democratization of wealth, which is set to be the most disruptive element and is important for all banks to consider.

What is the democratization of wealth? Consider a new wealth client. They’ll be asked how many assets they will bring with them - and we all know that the more assets under management, the less costs. This classical shaping of client segmentation should no longer be relevant - it is common for banks today to have affluent clients with high potential or even HNWI sitting in their retail divisions without being noticed. This tells me banks are not using the data potential they have, and customers are not going to wealth managers for guidance when it comes to their investments.


Wealth Managers are starting to rethink how and when they are selling to their customers. This starts with how you leverage client data in order to enhance the client experience. The future of finance is an end to end experience, like what a shopper might experience with Amazon or Apple’s Retail which augments on all channels. It is a seamless, predictive process that integrates several elements to strengthen the bond between the relationship manager (the front of the business) and the client, ultimately delivering better business opportunities.

Wealth managers have a huge opportunity to prime future clients through education offerings around basic investment principles. Investing is a journey, and everyone starts from the beginning, by educating the mass affluent segment through knowledge sharing technology the prospect pool increases and so does the client/advisor engagement. By providing smart services that provide more possibilities to wealth clients are liberated within an old and restrictive industry.

In this section of the Roadmap, we will focus on four main topics:

Firstly, enabling the investment advisor to develop new advisory and wealth management solutions with smart, digital tools to lessen the administrative burden and increase the quality of services provided to their clients. Customers are no longer fooled by expensive strategy funds that just follow a balanced strategy and charge 200 bps. It’s important to let customers know that good advisory service can however come at a cost and empower them to measure performance so that they understand what service they are paying for.

Secondly, the next generation of investors have become conscious of the impact investing can have on the environment or how they can use their investments to drive change and sustainability. This is a new demand on our customers that require new tools which integrate a range of sustainability criteria into the investment proposal and support their clients with such options as avoiding critical industries. Our solutions are dedicated to data analytics which will dramatically simplify the process for our clients, allowing them to deliver relevant products and increase their overall offering suite. 

Thirdly, wealth managers that are financial intermediaries, often serving clients with multiple banking relationships. The ability of managing wealth booked in different custody banks is important not only for EAMs, but increasingly important for banks which are thriving to become the one stop shop for their clients and look after their entire wealth. 

Finally, derivates, ETFs and structured products are becoming the norm for many different types of investors. As our client base of wealth managers and banks increases in providing these solutions to investors, we are ensuring that our solutions support our clients in delivering to these rapid market normalizations.

We are pursuing to build products that allow our customers to extend their wealth management services to a broader audience at a lower cost in an increasingly complex world. With technology there is no reason this cannot be achieved, and banks have access to the data that is needed to identify this.