The current state of wealth management services has one fatal operating flaw: they are managing rich people instead of managing wealth.
“We have conflated this issue of wealth management to managing the wealthy as opposed to actually providing wealth management services to individuals,” Leon Ong, partner, financial services advisory at KPMG Singapore, told Singapore Business Review. “Most people now see there’s a gap in the wealth management market, which is to serve the most underserved segment of the market: people like you and me, who earn more money than we spend.”
Although not flush with cash, the mass affluent market has the capacity to save money, Ong noted, but does not meet all the criteria to qualify for traditional wealth management services. Traditional wealth managers often have their eyes locked on servicing high net worth (HNW) and ultra-high net worth (UHNW) clientele. This is a massive missed opportunity that wealth technology or WealthTech firms have readily filled in.
WealthTech firms have notedly enabled lower cost, easier and simpler access to wealth management services and products that were traditionally available only to HNW individuals at a higher cost, noted Theron Lam, head of product development Southeast Asia, Schroders; and Sin Ting So, chief client officer, Endowus.
Lam and So, representing Singapore Fintech Association’s (SFA)WealthTech subcommittee, particularly highlighted how WealthTechs have helped democratise access to private assets by allowing individuals to access them via lower minimum investment amounts.
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