Displaying items by tag: wealth tech

Financial advice has long been seen as a luxury for the wealthy, but with new technology that’s rapidly changing,  Artificial intelligence is making high-quality financial guidance more accessible, helping advisors serve more people and empowering individuals to take control of their financial futures.

Today, only about 35% of Americans have a financial plan—a gap caused by high costs, limited access, and discomfort around discussing money. Traditional retirement strategies like the 4% withdrawal rule and fixed retirement ages are becoming outdated as lifespans lengthen and economic uncertainty grows. Many people rely on fragmented resources, such as online tools or informal advice, which often fail to create cohesive, personalized strategies.

Here’s where AI steps in:

• It delivers dynamic, real-time guidance tailored to individual life stages, financial goals, and challenges, far beyond what a static plan or annual review can offer.
• It democratizes access to planning tools, enabling younger investors, women, and middle-income families to build strong, personalized financial plans.
• It enhances professional advice by helping wealth managers streamline portfolio management, forecast needs, and deliver hyper-personalized service.

Finsum: For advisors helping clients plan for retirement, the right technology can help anyone make confident, informed decisions about their financial journey.

Collective Investment Trusts (CITs) are gaining popularity among retirement plan sponsors due to their low costs, flexibility, and operational efficiency. Unlike mutual funds, CITs are pooled investment vehicles maintained by banks or trust companies and are available only to qualified retirement plans such as defined contribution and defined benefit plans.  

They often have lower fees than mutual funds and may not require high minimum investments, making them more accessible to smaller plans. Though not registered with the SEC, CITs are regulated by banking authorities and must meet strict fiduciary standards under ERISA. 

Many CITs now feature daily pricing and increased transparency, including ticker symbols and third-party reporting through platforms like Morningstar. AllianceBernstein, for example, partners with Great Gray Trust Company to offer a range of CITs with streamlined onboarding and no investment minimums, reflecting the vehicle’s growing role in retirement plan investment menus.

CITs can be a great way to augment your client's wealth management, and add an additional component to their portfolio. 

Edward Jones has expanded its separately managed account (SMA) offerings by adding 51 new strategies, bringing its total to around 120 as part of a broader effort to modernize and attract wealthier clients. 

These SMAs, overseen by third-party asset managers, offer financial advisors more flexibility and personalization options, with plans to grow the lineup to 300 by year-end. Roughly 8,800 of the firm’s 20,280 brokers currently use SMAs, which appeal to higher-net-worth clients due to benefits like tax efficiency and tailored portfolios. 

While Edward Jones doesn’t disclose specific SMA asset figures, about $860 billion of its $2.16 trillion in assets are held in advisory accounts. Edward Jones also introduced a proprietary SMA program last fall and continues to lower barriers for entry as SMA minimums become more accessible to a broader client base.

Finsum: These SMA offerings could be a game changer in the wealth management space. 

Estate planning varies significantly by net worth, with high-net-worth individuals requiring complex trust-based strategies to reduce estate taxes and control asset distribution, while mass-affluent clients generally need simpler documents like wills and healthcare directives. 

Because legal costs can be a barrier for these simpler needs, tech startups such as Wealth.com and Trust & Will have emerged to help financial advisors offer affordable estate planning at scale. Charles Schwab recently acquired a minority stake in Wealth.com to provide self-directed estate planning tools for its mass-affluent retail clients, potentially competing with RIAs that use Schwab as a custodian. 

While this move could delay when clients feel they need to hire an advisor, many RIAs haven’t widely adopted estate planning tech due to low client usage and unclear ROI. Some advisors view Schwab’s actions as retail encroachment, but others see minimal threat since clients rarely update estate documents and often don’t view the service as highly differentiating. 

Finsum: Ultimately, Schwab’s investment reflects a growing DIY market segment, raising strategic questions for advisors about how and when to compete—or collaborate—with such tools.

Apex Fintech Solutions has introduced a new Direct Indexing platform designed to help advisors and fintechs create tailored, tax-smart portfolios for their clients. The solution enables investors to directly hold the individual stocks within an index, allowing for fine-tuned adjustments based on personal goals or values like ESG preferences. 

With a minimum investment of $10,000, it opens access to advanced portfolio customization for a broader range of users. The platform offers built-in benchmarks for large, mid, and small-cap equities, and incorporates automated tax-loss harvesting to improve efficiency and returns. 

Seamlessly integrated into Apex’s Augmented Advice™ suite, it simplifies portfolio management while supporting deep personalization. Future upgrades will further enhance customization, including user-defined indices and more precise portfolio adjustments.

Finsum: ESG is a great spot for custom indexing because it is ripe for picking companies that align with investor value.