ONLINE WEALTH MANAGEMENT

Executing a wealth management business online

Executing a wealth management business online

Introduction

The impact created by Information Technology in service industries, is both intense and dramatic, and plays an important role in how services are delivered. (Bitner et al., 2000). The academic focus on customer self-service technologies (SSTs), of late, is aimed at the significance of examining research issues where technology serves as a service enabler for the customer (see Gwinner et al., 1998; Bitner et al., 2000; Selnes and Hansen, 2001).

Wealth management is a discipline (investment advisory) which includes investment portfolio management, financial planning and some other financial services. High Net worth Individuals (HNWIs), owners of small businesses and families looking for credentialed financial advisory specialist tend to seek the technical assistance of wealth managers on investment management, retail banking, estate planning, legal resources and tax professionals. It is common practise to refer to wealth management as a high-level of private banking for the rich. In order for wealth management strategies to work, one must have acquired a considerable amount of wealth.

In order to generate top-line growth in the currently troubled economic situation, numerous financial institutions are contemplating venturing into the wealth management industry. Already, some firms with a rich customer base believe that it can be transformed into a wealth management offering, while others feel the need to appeal to prospective clients to expand their customer base. The development of a strong wealth management offering is not an easy task, no matter which customer segment these institutions look to focus on. The key to a successful organization is that it should meticulously analyse its target customer base, study its own strengths and weaknesses, and react to the competitors' actions in an appropriate manner, besides using technology to serve the less profitable customer base in a cost-effective way.

As is the case with the rest of the financial sector, the wealth management industry has also been overtaken by the technological revolution, in that it has taken to online mediums in order to reach out to in-land and offshore clients. There are many banks and wealth management institutions that are now utilising online means effectively in order to reach out to their customers all over the world. The two tangible effects that it has had on the business in general, are that it has resulted in a reduction in costs of information management (information collection, storage, processing and finally transmission), by serving as a replacement for the labour-intesive and paper based methods, by means of automated processes. In addition, new delivery channels have opened up, resulting in an increase in networking prospects with the third party. It has also resulted in an increase in the level of competition and enhanced transparency, thereby making it convenient for clients to compare products and services offered by different companies.

Therefore, the use of online technology shall serve the wealth management industry well because it would enable them to have multichannel delivery systems, through which the clients would be able to avail wealth management ...