Knowledge Base Articles

Personal Accident Insurance: Would My Savings Suffice?

Today’s case study examines a real-life experience of a Swedish family who struggled to receive adequate help from the local wealth management service providers.

Skandia Case Study II: Building Channel-Agnostic Wealth Experiences

Skandia strives to build communication channels in a digital space that would match the physical experiences in engagement levels and even improve the service quality in a way that has not been achievable before.

Beyond Modern Portfolio Theory: Expected Utility Optimisation

The modern wealth management industry still relies on the 50-year-old approaches to portfolio management, widely popularized by Markowitz's Modern Portfolio Theory (1952). Despite heavy criticism within the academic circles, the alternative methods remain undeservingly overlooked in practice. In the context of the modern leap for hyper-customization, we look into one of the alternatives to Modern Portfolio Theory in greater detail - the Utility-based approach.

Part I - Portfolio Construction - Parameter & Model Uncertainty

There is a number of challenges associated with portfolio construction based on historical data. This three-part article series explores some of the most common issues attributed to the model-based portfolio optimization: the sensitivity to changes in data, large variations in portfolio weights and the bad out-of-sample performance.

Hierarchical Clustering: Prediction of Systematic Underperformance

As machine learning methods grow in use and popularity, we explore yet another dimension of wealth management that our experts consider fit for applying such frameworks. In this article, we deploy hierarchical clustering to find more consistent ways of predicting the relative future performance of funds.

Part III: Asset and Liability Management Using LSMC - Allocation Optimisation

In the third and concluding article in the ALM using LMSC series, we focus on analyzing the optimal asset allocations in the context of changing asset classes as well as finding the optimal allocation by maximizing the risk-adjusted net asset value. The estimates based on the LSMC method are then compared to the estimates obtained from the full nested Monte Carlo method.

Blog Articles

One small step: How making incremental improvements to your wealth technology can boost advisor revenue

“One small step for man, one giant leap for mankind,” said astronaut Neil Armstrong when he walked on the moon. With regards to wealth technology, taking small steps can deliver big changes, and adopting a mindset of incremental improvement can deliver value over time. Being a provider of a portfolio management system (PMS) that powers wealth manage-ment firms requires a commitment to investing in wealth technology. Delivery needs to be better, faster, cheaper than the competition. So how can you escape this conundrum?

Top Trends to Watch in WealthTech during 2023

Global consultancy firm Bain & Company released a new study predicting that customer demand for wealth management services will double over the next eight years, growing to more than $500 billion by 2030. Moreover, with total global financial wealth in 2021 reaching $250tn, 12% of UK adults are using at least one investment app as of July 2021, proving that the industry is only to get stronger. But with inflation roaring again, will the explosion in retail investing built around bull markets take a hit? Let’s delve into what trends are shaping the industry.

Supporting Wealth Planning for the Next Generation

Over the next decade, between 30 and 68 trillion dollars will be transferred by families to their children. In the UK alone, estimates are $15.4 million over the next decade, according to a Russell-Cooke study. Succession planning by wealthy families and family offices is a hot topic in those rarified circles. But for many affluent families, wealth planning has not been priority. According to a report by Russell Investments, only 26% of families have a full strategy on wealth transfer, and once the transfer occurs, 90% of the heirs change advisors. In some countries, such as Switzerland, strict laws prohibiting advisors from contacting the heirs of a deceased client can eliminate communication. Sadly, 70% of families lose control of their assets after the transfer.

Be seen to be believed: Using financial simulation to inspire your clients

Remembering her Majesty the Queen of the United Kingdom, Elizabeth the II, she often said that her public appearances were important because “I must be seen to be believed.” How can wealth managers help clients visualize their financial plans? Using technology to simulate different scenarios, provide analytics and keep clients engaged is one way to proceed.