Wealth Management in the 21st Century!

At Symetrics, we believe that all financial risks can be measured. We believe that when you measure risk, you can diversify, hedge and develop strategies to beat the odds and anticipate a different tomorrow.  Financial assets are essentially risky by their nature, so we throw every computational method, any calculation there is, at all things financial. For this purpose, we have developed a computational beast: SyMath.

As you can see in demonstration videos on YouTube that we presented earlier, SyMath is a modular, versatile, number cruncher that is exceptionally fast, uses well established econometric methods as well as experimental new approaches. All have one key element in common: it allows you to measure, and quantify risk. SyMath does not predict the future, it provides you the means to measure risk, and it can simulate future risk materializing.

In this blogpost, we would like to highlight the demonstration video we made for the final of the BNP Paribas Hackaton in Paris, December 2016. This video shows you how different functionalities of the modules within in SyMath can be rearranged in a very different environment, or basically, how our risk tooling can be plugged into a CRM-system of a Wealth Manager.

Business as usual?
Enrolling new private wealth clients nowadays is still largely a question of assessing risk appetite and then selecting an existing fund that meets the outcome of the assessment. The fund that matches the risk appetite is then explained with an historical overview of its performance. Depending on portfolio risk attributes, some funds perform better than others. And what we see of course, is a lively competition. Considering increasing regulatory scrutiny, with regulators questioning fee-structures and examining services offered, a wealth management fund can re-invent its business model by upgrading its business services. With our tooling, we make fully personalized portfolios available.

Wealth Management Tooling
Our Wealth Management application enables a wealth manager to implement three distinctive asset management solutions that are unavailable in the market place today. Firstly, it introduces fully personalized portfolios in combination with financial risk tooling that allows portfolio based client segmentation in a smart and sensible way. Secondly, it connects in-house expertise to clients by sharing elementary risk analytics for their personalized portfolios, offering them both an understanding and a voice of how their net worth is to be managed. Thirdly, it makes operational processes easier and more cost effective because communication between all stakeholders is streamlined, automated and logged so that all regulatory requirements are met and can be accounted for.

Personalized Portfolios & Objective Risk Monitoring
Our risk tooling measures both risk and return of all assets for which data is available. By monitoring performance in terms of risk and return of assets, protocols guide managers how to proceed constructing new portfolios with clients, or how to proceed and execute client’s decisions to adjust an existing portfolio. The client is given the toolset that helps him or her define the risk appetite and return objectives so that the client has an insight in the risk and return parameters. This approach also allows to relate the client’s portfolio risk to that of others, allowing a client an insight in other portfolios’ risk and return. This approach does not rule out an allocation to in-house funds or a certain mix thereof, but it offers clients flexibility to differentiate. Also, this approach manages client expectations.

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Considering the screen of the chief economist or more broadly, the research team, we can see that a new client protocol can be implemented as well as new scenarios or trend outlooks. A new client protocol can be revised for different reasons, but from the perspective of being compliant to regulators rule-books, it is an easy and effective way for the management to implement a single protocol for account managers to follow.

Connecting Expertise to Clients’ Portfolio Needs
By connecting experts’ views to client portfolios, the asset or account managers are given the toolset and CRM-system to pro-actively monitor clients’ portfolios. Their client overview menu shows them an alert for portfolios that are especially vulnerable for a risk-event (i.e. Brexit and significant pound sterling exposure in a portfolio), or because the client defined risk threshold is (almost) met and a review is warranted, or because a client has logged on, indicating the client looks at his or her portfolio because of certain macro-economic developments. Or simply, an alert is shown because an annual or quarterly meeting is scheduled.
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Streamlining the Operation
Because portfolios are personalized and monitored for risk and return, all reporting becomes personalized too, which makes it important to automate, log and administrate portfolio changes. By adding a functionality to export a client report, the back offices can execute and log any order, while the portfolio characteristics are automatically changed after the order is executed. By giving clients access to the available risk tooling, the wealth management business can be strengthened through improved client retention and the solutions it offers by suggestions for rebalancing, diversification, and hedging.

Upgrading Wealth Management Business
By offering clients an interface through which they can monitor and look at their personal portfolio's risk and return numbers, they are becoming part of a more engaged management. This is not necessarily more active, but with all the benefits of expert asset management services, they are better informed and are invited to express their preferences. Also, clients can look how in-house expert views on macro-economic developments, along with tested scenarios might impact their portfolios. Based on the analytics in combination of the asset management expertise, they are offered options. How can they diversify, rebalance, or hedge their portfolio?

If you ask us, wealth management in the 21st century will change drastically because by empowering your clients, by offering them personalized portfolios, your business will be put on a solid footing for growth.