Asset management is a game changer for any organisation or individual seeking to make the most out of what they already have, or aiming to make informed decisions for the future. What to invest in next? What needs an update, and what areas are carrying a little extra fat that, actually, could be trimmed from the estate?
It’s now possible to utilise automated systems to glean clearer insights for these problems – on the premise that algorithms can illuminate solutions and aid with risk assessment. An algorithm is a computer generated approach to calculations and problem-solving given a list of rules or set of conditions, and is able to automatically sift through all available data to reach conclusions in a time frame beyond human capability.
Historically, both businesses and individuals have forked out significant percentages for the hitherto exclusively trusted investment advice of financial advisers. Now, some start-ups are making algorithm-generated advice available at a fraction of the price. The rise of big data has been an important factor in this. The more data, the more information algorithms have to work with. But traditional asset management organisations can also work with the developing capabilities of big data to improve current services – thus continuing to offer the most valuable insights on the market.
In response to start-ups such as Wealthfront and FutureAdvisor, some incumbent investment advisers are even opting to work with insurgent automated advisers, or to launch their own lower cost services. JP Morgan Chase and Goldman Sachs have backed Motif, a start-up that builds baskets of stocks based on investment themes. Wealth management giant Charles Schwab rolled out its own automated service in March and Schroders, a large European asset manager, has backed Britain’s newcomer Nutmeg.
With the intelligence to be gleaned from algorithms and new technology constantly improving, traditional asset management organisations risk inhibiting business growth if they continue to rely on legacy IT systems or proceed with an outdated approach to data. Nowadays, asset management organisations have to adopt advanced, scalable systems and platforms to maintain a competitive advantage. Cloud computing can often help to facilitate this.
With Trustmarque’s help, organisations can be empowered to make their own choices with the help of individually adapted IT for financial services and Software Asset Management (SAM). For example, Trustmarque enabled Mitsubishi to enhance their asset management platform with secure hosting and cost-effective assurance , while Ignis Asset Management has benefitted from improving internal communications with Sharepoint.
Automation and algorithms are already on the way to making asset management easier – and the services available will continue to progress.