Transforming Wealth Management with Digital Solutions

Logo of The Family Office

The New Digital Reality in Wealth Management

The wealth management industry has been traditionally slow to adopt new technologies, content with the tried and tested face-to-face interaction and customary marketing while their clients grew accustomed to digitally enabled services in countless aspects of their lives.    

According to the World Wealth Report 2020, more than 60% of high-net-worth clients are dissatisfied with the degree of personalization offered to them.

In its Global Wealth 2021 Report, Boston Consulting Group (BCG), identified several friction points faced by different client groups.

“Simple-Needs” clients, for example, those with financial wealth between US$100,000 and US$3 million, are too large for retail offerings but not large enough to warrant personalized solutions from their financial advisors. Besides the lack of personalization, common complaints from this group include product complexity, lack of transparency about fees, lack of an engaging experience with long waits calling the helpline, and limited financial literacy.

But even the “New Ultras,” those between the ages of 20 and 50 who have or will have total financial wealth exceeding US$100 million, complain about the lack of personalization, a transaction- or product-driven exchange rather than an interaction-driven experience, and an exclusively human approach rather one that combines the best of human and digital.

A New Digital Wealth Management Model is Needed

Meeting the plethora of customer needs requires designing a digital model with a deep understanding of client needs and optimized efficiency.

According to BCG, such a model comprises five core elements:

1- Advanced technologies such as behavioral analytics and digital tools that automate the end-to-end process to enable relationship managers (RMs) to deliver bespoke experiences at scale and at the right moment.
 

2- Contextual and consumable learning that allows clients with varying financial knowledge to make better decisions with confidence.

3- Smarter experience design that provides content in a clear, user-friendly, and engaging way. For instance, it could be a personalized dashboard of key indicators with well-designed visuals that can break down complex topics into easy-to-consume sections. It could also be a portfolio simulator that allow users to explore various variables such as investment amounts and risk appetite.

4- A pricing model that is simplified and transparent.

5- Exclusive investment opportunities that are not typically available to non-institutional investors, such as private equity, hedge funds, and venture capital. These often require a high minimum amount that excludes retail investors, but a digital solution can aggregate these investors as one to meet the minimum investment amount.

Besides upgrading the customer experience, a digital solution empowers the RM, which further improves decision-making and deepens client engagement.

However, building a digital wealth management model is not easy. According to the Digital Transformation Report by Refinitiv, 50% of wealth managers found providing a more sophisticated digital experience a challenge for their firm. The global consulting firm McKinsey & Co also notes that the average digital transformation project has a 45% chance of delivering less profits than expected.

Deloitte notes that wealth managers not only must contend with complex regulations, but they are also impaired by complicated legacy infrastructures that include disparate systems and cumbersome or disconnected workflows.

The Family Office Leading the Digital Way in the GCC

Having recognized the importance of digitalization years ago, The Family Office embarked on a digital transformation journey in 2020.

The Family Office, the leading wealth manager in the GCC, will soon launch a first-of-its-kind digital wealth management platform in the GCC that delivers highly personalized solutions to a wide audience of investors. This platform provides:

- A simplified and transparent wealth management process with all-in-one dashboards and services.


 

- Interactive tools, such as portfolio builders that create customized investment solutions and simulated performance within minutes.

- An opportunity to learn from the best with exclusive and tailored investment insights and events.


 

- A wide range of exclusive investment opportunities in different asset classes and geographical locations that are usually available only to large institutional investors.

  


This platform is the culmination of 18 years of preserving and growing over US$2 billion of wealth for hundreds of high-net-worth individuals and families since 2004. With the release of its new digital platform, The Family Office is leading the digitalization of wealth management in the GCC.

About The Family Office

The Family Office is a Bahrain and Riyadh based global wealth manager, regulated by the Central Bank of Bahrain and the Capital Market Authority of Saudi Arabia, serving hundreds of families and individuals. The firm offers various services to help clients achieve their wealth goals using custom-made investment strategies that cater to their unique needs. 

Disclaimer

The Family Office Co. BSC (c) is a Category 1 Investment Firm regulated by the Central Bank of Bahrain C.R. No. 53871 dated 21/6/2004. Paid Up Capital: US$10,000,000. The Family Office Co. BSC (c) only offers products and services to ‘accredited investors’ as defined by the Central Bank of Bahrain.

The Family Office International Investment is a joint stock closed company owned by one person. Paid-up capital SR20 million. CR No. 7007701696.  Licensed by the Capital Market Authority (no. 17-182-30) to carry out arranging, advisory and managing investments and operating funds, with respect to securities.