Democratizing wealth management

Roadmap24

Since 2015, Avaloq has been providing wealth managers and banks with services that empower advisers to focus on what they do best: providing their clients with sound advice by reducing costly administrative processes. Avaloq’s solutions work with all asset classes, including private equity vehicles or privately placed structured products, providing automated regulatory activities like pre-deal suitability checks as well as target-market and cross-border checks. This is done by automatically pulling product information sheets from third parties and creating advisory protocols which will remain auditable for many years to come.

Avaloq has more than 25 clients using the current investment advisory solution, which is fully integrated in the Avaloq Banking Suite. With Avaloq’s investment suitability framework, our clients can serve their clients in a fully automated regulatory way and are able to automatically send pre-trade documents and protocols. Our new advisory experience on the wealth platform forms the basis for all new wealth management products, and we’re building on this vast experience in providing software that allows our clients to provide scalable and bespoke advice.

Market needs

Over the last 20 years, we’ve observed completely different levels of client engagement in the investment process. In 2000, it was simple for wealth clients: their appetite for returns could easily be fed with the next hot stock or internet phenomenon, and participation in what was considered a modern age ‘gold rush’ was all that mattered. Little thought or encouragement went into portfolio diversification.

This all changed roughly eight years later, with the collapse of Lehman Brothers and the mass-market adoption of engineered financial products triggering the recession. In a short space of time, this led to now-obvious concerns around issuer concentration of risk in investment portfolios and changes to investment advice (and new, previously unseen administrative burdens).

The Avaloq Wealth platform focuses on making advisers more efficient by providing them with tools to cut down the time spent on preparing and analysing investment proposals. An additional content management tool can act as a complementary tool that manages and distributes macro-and microeconomic research and converts ‘investment stories’ into actionable investment strategies and portfolio relevant insights.

Leveraging our experience with our microservice-based architecture and the wealth management platform that integrates with ecosystem partner products, like Adviscent’s interactive advisory framework. Though a set of APIs, it enables the front office to make informed decisions quickly and effectively while at the same time delivering an engaging and bespoke investment experience. Taking the client on the investment journey, which leads to higher proposal acceptance rates, as the client feels involved and ready to take the decisions needed in an advised mandate.

Vision

Today, we’re working on improving the client engagement process by reacting to changing consumer expectations in the digital age. Advisory has been redefined, and the Avaloq Wealth platform allows wealth managers to take their clients on a smooth investment journey, improving proposal acceptance rates and lowering advisers’ preparation time.

We’ve concentrated on three aspects. Firstly, we’re building a solution for the digital adviser, which caters for more demanding client interaction. Secondly, our solution will provide real-time feedback on regulatory checks and market risks. And thirdly, we’re focusing on great usability and simulation capabilities.

Roadmap

The next six months

We’ll launch the Avaloq Wealth platform for investment advisers, which will allow users to advise their clients in a multi-jurisdiction environment and provide compliant yet highly engaging investment advice.

The next 12 months

After launching the core offering for advisers, we’ll be looking to extend the capabilities to offer a discretionary portfolio management tool for managing, monitoring and obtaining analytics on model portfolios and discretionary portfolios in a scalable and bespoke way.

The next 24 months to three years

After completing the launch of the advisory app and adding new features and capabilities to the portfolio management app, we’ll extend the offering with a dedicated CIO view integration application. This will allow a CIO to analyse, track and incorporate investment committee views into tactical asset allocations and model portfolios.

Our dashboard will allow users to cover the entire wealth management life cycle, including structuring bespoke products, obtaining analytics across non-listed, illiquid instruments and leveraging optimization to allow users to cater to demanding clients in the high net worth and ultra-high net worth segment.

Besides covering the wealth management life cycle, we’re also aiming to offer our platform to asset managers across the industry, including independent asset managers.