WealthTech

The fourth quarter of 2019 was marked by an increased interest in B2B business models among the FinTech robo advisors. Although the shift from B2C to B2B has been in the headlines a few months before, the last three months yielded more concrete examples of how new players tailor their business models to cater to other companies, rather than consumers. Meanwhile, the debate on whether the process of financial advice would be entirely digital or contain hybrid elements continued as well - with many British players robo advisors adding human capabilities to the scope of their services. Finally, in the context of digitalised offerings, it becomes harder for the regulator to tell the difference between financial advice and guidance - and therefore it becomes essential to review the definitions of the services to optimise the consumer protection accordingly.

Over the years, numerous studies have shown how complex investment strategies fail to outperform simple asset allocation methods. Other studies emphasise the amount of sheer luck that goes into the favourable performance of the investment strategies; it has been repeatedly shown that in many instances, an attempt to deviate from the market portfolio has odds no better than a coin flip. These findings seem to point towards one cold fact - the optimal portfolio weights are impossible to find. Or are they?

Through September 10-11th, Kidbrooke Advisory attended the Robo Investing 2019 Event in London. Existing for over two years, the event has become an excellent platform for knowledge sharing and communication between numerous FinTechs, banks, consultancies and other players of the emerging industry, all across the world. Today we are summarising the core trends and themes discussed at the event. The main topics led the overall direction of the robo-advice offerings as well as tips and tricks on achieving more customer engagement.

In August, we distinguished three themes gaining momentum in the financial industry's innovation landscape. The first one concerns the positioning of the robo-advice on the Gartner hype cycle, from the peak of inflated expectations to the trough of disillusionment. The second trend explores the meaning of sustainability in the provision of financial advice. Finally, looking into the potential flaws of the machine learning-driven models sums up the third theme of the August press on the financial industry's innovation.