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This Is the Year Traditional Wealth Managers and Fintech Cozy Up

February 22, 2019

Traditional wealth managers and fintech firms are finally going to accept each other this year and partner up — in large part to get a piece of the upcoming estimated $30 trillion wealth transfer, according to one marketing strategist.

Incumbent firms will realize they’ll need to embrace technology to lure millennial clients, April Rudin writes on Seeking Alpha for the CFA Institute. Traditional players will also come to accept that leveraging technology can free up time to work on building successful relationships, according to Rudin, founder and president of the Rudin Group, a brand marketing and consulting firm for financial services companies.

Furthermore, advice firms will only be able to attract a younger workforce with “clean, reliable interfaces,” she writes.

“Analog solutions won’t cut it in a digitized world, especially when it comes to luring talent away from Silicon Valley,” according to Rudin. And the incumbents will need that talent since the average age of a financial advisor is now 55, she writes.

Fintech firms, meanwhile, will accept that at times clients want to speak to a human being one-on-one, insists Rudin. After all, fintech and artificial intelligence still can’t substitute for the insights and comfort provided by a face-to-face conversation, she writes. And despite fintech’s appeal to millennials, younger families are the ones who perhaps need that human touch the most, in order to balance student loans, mortgages and planning for their children’s education, according to Rudin.

April Rudin

In the end, clients are the ones who will benefit from hybrid advice, she writes. Algorithms will be able to offer portfolio allocation options — something human advisors once spent days doing, according to Rudin. And those algorithms will free up time for analyzing their recommendations more critically and offering more holistic advice, she writes.

By Alex Padalka
  • To read the Seeking Alpha article cited in this story, click here.