In the next three years, an unprecedented US$700 billion in wealth from Asia Pacific’s mass affluent and High Net Worth (HNW) segments is anticipated to migrate to digital WealthTech platforms.
As affluent consumers become more tech-savvy and open to digital wealth management, the region is set to experience significant shifts in how wealth is managed, marking a turning point for the industry.
McKinsey’s recent report shows a strong inclination among 50-60 percent of respondents towards growing their assets on digital platforms. With 80 percent of users citing lower costs, enhanced transparency, and tailored investment strategies as key factors, the wealthtech sector is primed to lead this transformation.
A Balancing Act Between High-Tech and High-Touch
Although wealthtech is gaining traction, the demand for human interaction remains substantial, with approximately 45 percent of surveyed clients still valuing personalised advice alongside digital solutions.
This points to a hybrid model as the preferred approach, allowing wealthtech companies to blend automation with human insight. Samuel Rhee, co-founder and chairman of Endowus, said that while technology enhances accessibility and efficiency, clients increasingly expect a service model that combines convenience with genuine connections and tailored advice.
“Wealthtech players must ensure they can maximise both accessibility and empathy. Empowering investors with personalised solutions is essential to meet their unique financial goals.”
To cater to these dual demands, wealthtech firms are investing in advanced robo-advisory algorithms capable of personalised asset allocation, rebalancing, and comprehensive investment guidance.
These tools allow clients to maintain control over their investments while benefiting from lower advisory costs and complete transparency. However, McKinsey noted that companies must continue to refine these offerings, keeping clients’ desire for a human touch at the forefront.
These insights were at the forefront of discussions at the recent Endowus WealthTech Conference in Singapore, where industry leaders gathered to explore the future of wealth management in an increasingly digital era.
Hosted at the Conrad Centennial Singapore, the conference welcomed 2,500 attendees and featured a lineup of prominent speakers from global finance and tech institutions, including Goldman Sachs, Amundi, Dimensional, and Franklin Templeton.
Official knowledge partner McKinsey & Company led discussions on a range of emerging topics, from the integration of AI with financial advisory services to the rise of liquid alternatives in investment portfolios.
Gregory Van, CEO of Endowus, highlighted the value of financial literacy and knowledge sharing amidst volatile market conditions, stating, “As we live through uncertain economic times, equipping ourselves with the right financial knowledge is crucial for navigating market turbulence.” Van emphasised the role of the WealthTech Conference in fostering knowledge and collaboration within the sector.
The Future of Financial Services in Asia Pacific
Asia Pacific’s wealth migration to digital platforms is poised to redefine the region’s wealth management landscape. As McKinsey reports, wealth management firms are racing to adapt to evolving client preferences, leveraging both digital tools and human advisory services to retain clients and attract new ones.
Wealthtech firms that succeed in striking the right balance between technology and personal engagement will likely capture a significant portion of the estimated US$700 billion shift, solidifying their role in the future of wealth management.
With experts predicting further integration of AI, real-time data insights, and robo-advisory services, the wealthtech sector is on track to transform the financial landscape. As more of Asia Pacific’s affluent choose digital solutions for their wealth needs, the industry will need to continuously innovate, combining the best of technology and traditional client relations to meet the expectations of a diverse, digitally empowered clientele.
