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10 Predictions About Wealthtech in 2020

By Samantha Tetrault, Xtiva

Wealthtech is the combination of wealth and technology, and it’s under the much broader fintech umbrella term. What makes wealthtech different from fintech? Wealthtech is primarily about creating tools for the management of wealth and investments. 

Wealthtech, like all of the finance world, is rapidly changing. New apps, technology, and solutions are introducing a golden age of innovation. What exactly is coming next in 2020? Xtiva, a sales performance management software, talked to 20 of the top wealthtech influencers to determine what’s on the horizon for Wealthtech trends in 2020. In this guide, we’ll break down some of their predictions about this changing industry. 

1. Changing Business Model

Even if AI tools like robo advisors only represent a small portion of overall wealth management, they still will have a fundamental impact on the advisor business model. Not only do more clients expect to see these types of tools, but we’re also seeing younger investors than ever before. 

There’s a new focus on maximizing day-to-day savings within investment opportunities. Along with a larger shift in traditional banking, the real power today is in understanding that each client has unique needs. 

2. Self-Reliance

Another big shift is in the way financial clients think. Many people, particularly younger generations, no longer feel comfortable letting someone else manage their month. It’s their money, and they don’t want anyone else in the driver’s seat. 

Luckily, new technology makes it possible for these self-reliant individuals to manage their own wealth long-term. From educational platforms to investment applications, it’s the new age of making your money work for you. 

3. Shifting Advice

In the past, it wasn’t necessary for wealth managers to dive that deep into their client’s needs. With the rise of technology, this is changing. Advisors need to play an increasingly active role if they integrate their advice into all aspects of their clients’ lives. 

What do clients want on a deeper level? How can they personalize their recommendations? How do they customize the information clients receive? With wealthtech tools taking over a greater load of the wealth management process, this level of personalization is now possible. 

4. Consolidated Advisor Dashboards

One of the greatest wealthtech trends is likely to be the rise of advisor dashboards. While advisors have utilized a number of different niche applications in the future, this just creates more overwhelm. 

Now, it’s all about finding comprehensive, consolidated solutions that really do it all. Advisor portals and dashboards provide all the data they need in a single screen, and there aren’t numerous alerts fighting for attention. 

5. Smarter Data

Client data is more important than ever. In wealthtech especially, this data needs to be protected and secured. Financial information will stretch beyond just managing lines of stocks and bonds. It will include additional data to assist with long-term plans, liabilities, projections, future obligations, and even legal documents. 

In this way, you can think of wealthtech leaders like doctors. The doctor needs to know more about you to make the best diagnosis. The same is true for advisors and other financial leaders. The more data they have access to, the smarter their recommendations will become. 

6. Lower Cost to Serve

Traditionally, wealth technology has been limited to higher earners. Financial advisors were primarily used by the wealthy. Thanks to new technology, these walls are breaking down. 

Technology makes financial advice more accessible to all. From automated tools that do the heavy lifting for users to advisors now being able to offer a range of services, the cost to serve is drastically going to lower in 2020. This means wealthtech will open to new socioeconomic statuses, changing the industry forever. 

7. Subscription Model

Speaking of a lower cost to serve, it’s not unlikely that we’ll see subscription-based models in 2020. Many applications and banks already offer these types of “freemium” services. While a free version might be available, a premium subscription is recommended for more comprehensive tools and assistance. 

This commoditization of investment management might be hard to grasp, but it is the next wave of the future. You can see this in real-time with services like Netflix, and what makes financial services any different? Soon, everyone will have a monthly phone call with a financial expert for $15 a month or something of the sort. 

8. Voice Technology

We’ve seen voice technology improve in big ways in the past few years, so it’s no wonder it’s making an impact in wealthtech as well. Most people already have Siri, Google, or Alexa in their lives. 

Voice provides both the message content and the distribution, and this is an instinctive human skill. Voice also adds extra security since it’s hard to fake or replicate. Voice technology soon will combine with existing wealthtech solutions, introducing a new form of data and security. 

9. AI Gives Advisors More Freedom

Since the cost to serve is rapidly lowering, financial advisors are looking for ways to diversify their revenue streams and client base. AI is the solution they’re looking for. AI makes it possible for advisors to streamline their financial planning process from start to finish. It opens a new world of digital-only and hybrid-digital programs to suit a range of clients. 

Since AI takes on a larger portion of the workload, advisors and wealth managers have more freedom to work with clients in a new way. The human difference will always be in demand. AI is just a tool to help provide deeper insights. 

10. Blockchain and Digital Assets

Finally, 2020 will likely see the digitization of investment assets. Today’s clients are already familiar with using digital and mobile tools to track and allocate investments. The way these digital assets are transferred is changing, and one of the biggest disruptors is blockchain. Not only is this more secure, but it’s undeniably the way of the future. 

Decentralized lending needs to become a part of the new finance infrastructure. Until that happens, wealthtech will drag behind other aspects of the financial and technology sector. 

The Future of Wealthtech

Welcome to the new decade of wealthtech and digital revolution. There’s no way to avoid the ever-changing tide of technology and innovation. Luckily, from taking a look at the predictions above, the future looks bright. To read the full list of preductions from the top influencers in the industry, read the full wealthtrend report from Xtiva. 

The way advisors, individuals, and banks manage wealth is changing dramatically. It’s also simplifying, diversifying, and opening to broader audiences. This is all something to celebrate. It’s time to face these changes head on to finally enter the Roaring 2020s. 


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