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2015 reflections: How far can technology take us?

22 December 2015

Ben Snee, Managing Partner

Preserving wealth, looking for opportunity and navigating financial markets for our clients is what we do - this is an art as well as a science and 2015 has required even more artistry than usual! To a large extent, markets have been dependent on the outcome of political decisions that were (and remain) difficult to predict, ranging from China’s currency devaluation and Opec’s decision to increase oil production, to the obvious current example of the Fed’s expected interest rate rise tomorrow. Interpreting Fed and ECB mumblings and reading the tea-leaves of economic indicators against this backdrop has made making the correct strategic and tactical calls in 2015 a challenge. Having said that, for the most part, we have tip-toed successfully through this economic minefield and I think are now as well-positioned as we can be for what looks like another challenging year ahead.

Aside from the ongoing consequences of central policy on financial markets, something that has caught my attention this year particularly is the proliferation of technology and the impact it is having on the wealth management sector. This is not a revelatory observation and neither has a single event occurred or particular innovation appeared to highlight this (although the ubiquity of Apple, certainly in my house, has reached seemingly epic proportions). It just seems that the way we do things now is different and that more than ever those not willing to embrace the brave new world are at risk of being left behind.

Vestra is a business built on trust and sound ethics, genuinely trying to do our best for clients. We have an excellent investment team and many years of experience amongst our Investment Managers. However, at its heart Vestra is a people business, providing a personal service to clients who, in many cases, are trusting us not only with their financial assets, but to guide them on life-choices that will impact those around them for generations to come. The challenge for Vestra and indeed many of the other businesses in our sector is to somehow bring together a service that by definition needs to be tailored, long-term and high touch, with a world that is increasingly commoditised, short-term and automated.

It seems to me that technology should be an enabler, allowing us to deliver our service in more and more convenient ways, rather than a guiding principle that shapes what we do at the risk of losing its essence. Not surprisingly, there is some confusion in the sector and therefore presumably amongst consumers, about what a wealth management service is and what you should pay for it. Technology is polarising the industry between low-cost technology-based platforms with model-based solutions on the one hand and more expensive service-led, bespoke wealth managers on the other. Each approach has its merits and to some extent they seem to be dividing consumers naturally according to levels of wealth, but the trick is to recognise that the approaches are in fact different and to understand what comprises each.

At Vestra we are clear where we sit and are excited about taking our business forward in 2016 and beyond, extracting the best from the technologies we see, whilst ensuring our message and core principles remain undiluted. Unfortunately, Apple’s devices are still unable to tell us what Janet Yellen will do tomorrow, but if nothing else, make very good Christmas presents!