Some digital wealth managers offer a much clearer picture of the risk in a portfolio by providing a robust, quantitative risk measure, which allows advisers to easily monitor that portfolio risk stays within the client’s risk tolerance in all market conditions.
There is much talk of the advice gap. For those with £10,000 to £200,000 to invest, full financial advice may not be cost-effective. Yet at this level, many investors have fairly straightforward needs: to maximise long-term savings by using tax wrappers such as pensions and Isas. Partnering with a digital wealth manager can give advisers a suitable low-cost, risk-managed, personalised solution for clients with liquid wealth from as little as £10,000.
Keeping investment costs low means that more money remains invested for the client’s future. As assets grow and the individual’s needs become more complex, full financial advice becomes more important and more cost-effective.
In financial planning, the personal connection between the adviser and the client is hugely important. That connection enables a comprehensive understanding of an individual’s circumstances, needs and goals.
But in investment management, human emotion and behaviour has been proven to be one of the main causes of underperformance. By marrying human advice with digital wealth management, the best investment solutions can be offered to a wider range of investors.
Adam French is chief executive and founder of Scalable Capital