At Akoni, we have been talking about how important the wealth management industry is for years. As a team of people with a wealth of experience in this space working with banks, we have seen how the industry has changed over the last few decades.
Once a best-kept secret amongst the wealthy and those in the know, wealth management and understanding the importance of saving has become more ingrained in the subconscious of the UK population and beyond.
Saving, and obtaining competitive interest rates to put oneself into a better financial position, has become much more attainable for everyone, no matter a person's family financial standing.
It no longer matters where you started financially in life (although we are not naive, we are all aware it helps as it is not something that is accessible to the majority of people). We are now entering an era where tips and tricks used by the rich are available to everyone - in particular, wealth management platforms that can be used by just about anyone.
Studies show that assets overseen by UK wealth managers grew by 10% between 2016 and 2018 - the sector now looks after over £1.5tn in assets. Today, around 2.4 million people in the UK use wealth managers for investment, retirements and tax planning advice. There are 66.65 million people in the UK, making that just over 1% of people in the UK using these services to fund their futures (1.59% to be exact).
So if only around 1-2% of people in the UK are using wealth management services, should we even start to suggest that wealth management is becoming more mainstream? Are we seeing a new shift in the way people think about wealth management? And if so, why is this shift happening now?
Where does the UK place in the world for wealth management and handling of assets?
The UK is the second-largest wealth management hub worldwide, beaten by wealth management global leader Switzerland.
As London is one of the epicentres of international finance and a global hotspot for international trading, it should come as no surprise that the UK broke into the top two countries working in wealth management.
As a leader in this space, the UK has been pushing boundaries using technology to create accessible wealth management solutions. These solutions have been built to enable the majority, not the minority of people to support them with their financial ambitions. People may want to earn more interest on their savings and encourage savvy financial habits designed to set up people for the long-term, and in some cases the short-term.
One reason we see wealth management increasing in popularity is the discussion around generational wealth. As millennials take up a lot of space online, dominating many conversations around money, we can see topics around the disparity in wealth increasing. These topics include the burgeoning generational differences in attitudes around cash, and the ability to access cash. Both are topics that can lead to (sometimes) uncomfortable discussions. Yet, we all know that through discomfort and lack of accessibility comes innovation - hence the increasing popularity around technologically-powered wealth management solutions and saving options.
According to data from the Federal Reserve, despite making up the largest portion of the workforce, millennials controlled just 4.6% of US wealth through the first half of 2020. In comparison, baby boomers control over 53% of the country's wealth, Gen X accounts for just over 25%, and the silent generation holds around 17%.
Millennials are using social platforms such as Instagram, TikTok and Twitter to understand how they can set themselves up for financial success. Plus millennials, are much more willing to discuss their finances with family and friends than their generational predecessors. As millennials want to create more wealth for themselves, it is interesting to note that one study found that 61% of millennials believe that they will be working at least part-time during retirement.
A key differentiator for investment funds and savings providers, as well as advisers offering solutions to their clients, is the institution of environmental, social and corporate governance (ESG) policy throughout their offerings. This can help investors avoid companies that might pose a greater financial or reputational risk due to their environmental or social governance practices. Sectors and companies that are proven to have a detrimental impact on society or the environment are normally excluded from the ESG investment universe.
More money than ever is going into ESG funds, and there has been great momentum behind ESG, as UK-based sustainable funds have spiked from £4.4bn in 2008 to £15.4bn in 2017, according to the Investment Association.
The wealth management sector has been looking hard at how ESG investments can change the way consumers invest. So it comes as no surprise that leading investment management platforms and certain global financial institutions have begun the ESG revolution to help financial advisors place their client's money into an ethical fund - pushing ESG ideology into the mainstream.
Creating space for the 99%, not just the 1%.
It is a no brainer when you think about it. By increasing accessibility to wealth management tools, and the shifting attitudes around knowledge sharing (topics include benefits of saving and the options consumers have to get a good return on cash), wealth firms can market to a much wider audience.
All of the above points make for a compelling story. Whether wealth firms want to help those who may not have had a financial advantage in life or who want to make ethical investment decisions, the industry no longer carries the baggage nor the reputation of a stuffy, financial solution that appeals only to the wealthy and ethically naïve. As the industry slowly sheds its old values, the promise of technology and shared societal values means that the wealth industry has a lot of potential to flourish on a mainstream level.
As the world becomes more socially conscious and understands the importance of democratising finance, it makes sense that the wealth industry has opened the doors to brand new audiences, and in turn, creating a buzz around the benefits of saving and long term financial planning. Although just under 2% of the UK utilises wealth management advisors, we believe that more and more people will see the value in these services and push people towards using forward-thinking platforms to give them the best possible opportunity for financial success.
Who is Akoni?
The award-winning Akoni Cash Management Platform is already leading the way in the wealth management sector, and has partnerships with Barclays, Aldermore, Investec, Clydesdale, amongst others. The ability to whitelabel the platform gives IFAs and financial advisors flexibility to help their clients move cash depending on ever-changing macro and micro environmental factors.
Recently, Gemstone Legal has partnered with Akoni to help people easily manage their cash onto one savings dashboard with easy and fast access to rates from highly rated banks. The range of choice on offer means you could be earning more interest on your cash across multiple FSCS** protected bank deposits.
So, why should you choose Akoni to help you with your client’s cash decisions?
1) Safe and secure with the FSCS Government deposit guarantee
All deposits are held with each bank providing protection of up to £85,000 per bank, or up to £1 million for Temporary High balances.
2) Diversifying risk (spreading money across savings providers)
With the option to spread cash across several providers on the Akoni Cash Management Platform, you can diversify risk, and increase the chances of positive returns.
2) Increased returns and better interest rates
In a climate of economic uncertainty, and with interest rates being cut across many providers, it’s not easy to find decent interest rates in a simple way. With Akoni, you can find competitive interest rates to suit your client’s specific needs.
4) Quicker, and hassle-free - no form filling
Akoni Hub provides a hassle-free cash management experience - your clients can onboard and open an account online with no fuss. Clients will only need to complete one AML/KYC process, can switch between providers, and manage their account on the Akoni Cash Management Platform in just a few clicks.
5) White label Adviser portal and tools
You have the flexibility to create a platform that works for you and your clients. Add your branding to showcase who you are through a sleek, professional cash management platform designed with you in mind.