The world of wealth management is undergoing a transformation as alternative investments become more widely accessible, opening doors to new prospects and challenges. Once reserved for institutional players and the ultra-wealthy, these investment avenues are now open to a larger segment of investors, particularly those in the mass affluent category who have assets between $100,000 and $1 million. Retail investors are increasingly intrigued by these options, seeking higher returns and diversification, aided by expanded access to valuable investment information.
For wealth managers, this change presents a significant opportunity to stand out in the competitive market, maintain their current clientele, and draw in new business. As a result, more advisors are beginning to incorporate alternative investments into portfolios, with a staggering 85% planning to boost these allocations in the next year. Yet, the complexity of managing and reporting on these sophisticated assets calls for advanced solutions.
The challenge lies in dealing with private fund data that is often non-standard, lacks structure, and is provided sporadically. Advisors must painstakingly collect this data, then decipher and standardize it to present clients with a complete picture of their portfolio holdings. This necessitates robust systems capable of navigating these complexities and delivering comprehensive reports to clients. The operational hurdles grow with each alternative investment fund included in a portfolio, with an overwhelming number of documents and lengthy retrieval processes becoming all too common.
Selecting a solution that marries cutting-edge technology with in-depth knowledge of alternative assets is crucial. The ideal approach leverages intelligent automation to access documents from fund manager portals, combined with natural language processing to interpret and extract pertinent information for further system processing. It’s imperative that the data extracted is cross-verified by knowledgeable users as part of a rigorous quality control process to guarantee its accuracy and thoroughness. Outsourcing these functions is often the most efficient and economical strategy, providing wealth managers with the necessary technology and expertise without the strain of maintaining these resources internally.
For a deeper dive into how outsourcing can empower wealth managers to capitalize on the burgeoning opportunities in alternative investments, consider downloading our whitepaper titled “Wealth Managers: How to Make the Most of Opportunities in Alternative Investments.”
