• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Alternative

Four ways platforms use innovation to harness new audiences

Four ways platforms use innovation to harness new audiences
  • Thomas Lowe
  • 18 October 2019
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

Our industry faces great challenges - from creating solutions for new generations of investors to navigating rapid technological and regulatory change. However, by collaborating with industry partners and harnessing investment innovation, platforms can not only embrace these challenges but begin to introduce investment platforms to a broader client universe. 

This demand means not only an evolution in infrastructure, but a quantum leap forward in understanding how new themes and mega-trends will reshape the industry and investment landscape.

Related articles

  • Novia adds expanded Copia ETF operation
  • Novia’s Copia DFM launches iShares portfolio range for ‘decumulating’ clients
  • Asian financial big guns and millennials drive ESG growth - report
  • Five tech trends set to revolutionise wealth management

Address the millennial wave 

The investment industry is arguably light years behind other industries in terms of user experience. According to a Facebook data survey, 92% of millennials do not trust high street banks following the financial crisis. Meanwhile, this demographic is now attuned to seamless, user-friendly services, such as those provided by Amazon and Google.

However, a sizeable portion of the investment industry is run on mature technology requiring manual entry in key areas, which can ultimately create inefficiencies for clients. Collaboration with cutting-edge technology providers will allow wealth platforms to drive greater efficiencies and deliver cheaper solutions to clients, while creating straight-through processes that will drive transparent and seamless user interfaces.

The industry has also failed to engage with this audience and align to its ethics and interests. However, thematic investing is rapidly opening up to mainstream investors. For example, last year, BlackRock launched the iShares Thomson Reuters Inclusion and Diversity UCITS ETF, which tracks stocks with the highest diversity and inclusion metrics. And this year, the ETF innovator launched the iShares Electric Vehicles and Driving Technology UCITS ETF, tapping trends in electric car automation. Platforms must realise thematic instruments can capture the imagination of the future generation of investors by creating exposure to a spectrum of trends, from ESG factors to technology. 

Support the ESG revolution 

ESG to date has largely been the preserve of institutional investors, but we are now seeing it adopted by the mainstream retail market - driven by a new breed of investors who want their investments to have a positive impact on the world around them. Investors like Hoshang Daroga of Copia Capital Management believe the proliferation of ESG strategies will be a self-fulfilling mega-theme, as capital around the globe flows away from companies with poor ESG practices to those effecting positive change. 

Copia has seen a sharp increase in adviser demand for ESG strategies, while BlackRock expects assets under management in ESG ETFs to swell dramatically in the next ten years, driven by accelerating retail demand. It is important both platforms and advisers develop a greater understanding of ESG themes via both mutual funds and ETFs as demand gathers pace.

Outsource to industry expertise 

While platform pioneers, such as Novia, have led the way in providing advisers and underlying investors access to ETFs, not all platforms are supported by the requisite technology. Unfortunately, those which have not integrated innovative infrastructure into their technology stack from the outset have been challenged to keep pace with new fintech players. Platforms without the right technology and integration have also been hindered by higher trading and associated costs due to cumbersome legacy systems. 

This creates a regulatory gap for advisers - as failing to provide ETFs creates an uneven playing field with a natural bias to often higher cost vehicles such as unit trusts. To ensure advisers get access to a broad range of investment instruments, platforms can look to partner with industry peers in order to deliver technological solutions. Fortunately, we have also seen trends in outsourcing to discretionary fund managers (DFMs) by financial advisers. This allows financial advisers to focus on their core skills, while the outsource managers provide underlying clients with the full menu of product innovation.

Remove fractional share barrier 

According to Gemma Godfrey of digital investment platform Moola, there are 13 million households in the UK without access to investment advice. She believes one of the barriers has been a failure by our industry to engage on education and an unwillingness to remove jargon from investment communication. She is also a proponent of wider adoption of fractional shares - which she believes are about to make big waves in the investment world. 

A fractional share is simply a share of equity that is less than one full share. Previously, micro investors could not buy a stock like BP or an ETF fund if the unit price was more than the cost of the regular contribution, leaving a diminished investment universe and inefficient portfolio rebalancing. 

We are assisting platforms in adding fractional share dealing services, allowing micro investors to buy these securities with as little as one penny, rather than a whole share, across a range of asset classes. Ultimately, we believe fractional share dealing services will help more platforms build wider investable universes for micro investors and encourage saving. They will also help address the growing intergenerational wealth inequality by unlocking the power of investing a little, often and early.

Thomas Lowe, head of product at Winterflood Business Services

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Alternative

More on Alternative

Janus Henderson Investors launches multi-strategy UCITS fund

  • Alternative
  • 03 June 2020
Law firm comments Esma shorting policy amid Coronavirus crisis

  • Alternative
  • 19 March 2020
Columbia Threadneedle suspends dealing in retail property fund

  • Alternative
  • 19 March 2020
AMX adds two to Irish operations

  • Alternative
  • 18 March 2020
Sweden ditches amortisation requirement in response to Coronavirus

  • Alternative
  • 18 March 2020
Back to Top

Most read

SharingAlpha's 2020 top rated funds by category revealed
SharingAlpha's 2020 top rated funds by category revealed
Duff & Phelps opens Gibraltar office
Duff & Phelps opens Gibraltar office
DeVere launches equity fund with Columbia Threadneedle Investments
DeVere launches equity fund with Columbia Threadneedle Investments
Brexit deals hefty blow to City but industry is ready to fight back
Brexit deals hefty blow to City but industry is ready to fight back
HNWIs in SE Asia cite lack of financial knowledge as greatest concern: report
HNWIs in SE Asia cite lack of financial knowledge as greatest concern: report
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading