Wealthtech: Technologies for Wealth Management

What is wealthtech

Wealthtech is the application of technology in wealth management. Traditionally, it has been a closed, elite industry. Technologies democratize access to investments.

Robo-Advisors

Robo-advisor: an automated platform that builds and manages a diversified portfolio based on the client's risk profile.

Model: the client answers a questionnaire → algorithm determines the portfolio (usually ETFs) → automatic rebalancing → all of this is inexpensive ($0 or 0.25%/year).

Major players: Betterment ($35 billion AUM), Wealthfront ($27 billion). In the UAE: Sarwa, StashAway.

Limitation: does not take into account complex situations (tax planning, business, real estate, family circumstances). For UHNWI—insufficient.

Digital Platform for Family Office

A modern Family Office uses technologies for: (1) portfolio consolidation (aggregator of all accounts, banks, assets in a single dashboard); (2) performance reporting (returns by asset class, comparison with benchmark); (3) tax reporting (tax reports in all jurisdictions); (4) risk monitoring (stress test, VaR).

Leading platforms: Addepar, Allvue, Landytech.

Alternative Investments in the Digital Era

Tokenization of Real World Assets (RWA): real estate, Private Equity, loans—tokenized on blockchain, accessible to retail investors with smaller amounts. Ondo Finance, Maple Finance.

Secondary markets for liquidity: Forge Global, EquityZen—platforms for selling shares of private companies between investors.

Practical Assignment

Family office ($150 million in assets): shares of public companies in different brokers, PE fund (not yet in production), real estate in three countries, bank accounts in five banks. Task: receive a consolidated report on the portfolio status in real time. (1) Which technological platform to choose? (2) How to integrate all data sources? (3) What reports does the family's CIO need?