Twists in U.S. youth wealth, new in fin comms, and more. — WealthTech Fusion, 9 Feb
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What’s in:?
Let’s zoom in on the details.
?? Funding and investment updates
Suma Wealth , a WealthTech platform focusing on the financial needs of young U.S. Latinos, has secured $2.2 million in funding led by Radicle Impact Partners .
Other participants include VamosVentures , OVO Fund , and the American Heart Association Impact Fund. This adds to previous rounds, bringing the total funding to $5.5 million.?
Founded by Beatriz Acevedo , Mary Hernandez , and Xavier Gutierrez , SUMA Wealth offers tailored financial content and products, partnering with major institutions like Morgan Stanley and JP Morgan. The funding will support acquisitions like Intellecto and expand technology offerings for improved personalization and analytics, along with new hires across departments.
docStribute?? , a pioneering RegTech firm based in London, has completed a pre-Series A funding round with a significant investment of ￡820,000 (~$1,032,300), primarily from financial service angels.?
Specializing in Distributed Ledger Technology (DLT), docStribute aims to revolutionize financial institutions' communication with clients while ensuring compliance with FCA guidelines. The funding will be used to strengthen development and marketing efforts to enhance customer integration and accelerate business growth.
Christopher Ansara , Founder of docStribute, highlighted the milestone's importance in redefining financial services communication and shared plans for continued innovation following the successful onboarding of a tier 1 bank in 2023.
?? Wealthtech Cahoots
AdvizorStack and StratiFi Technologies Inc have announced a strategic partnership to enhance risk management and compliance oversight for registered investment advisors (RIAs) and wealth management professionals.
Through this collaboration, users of AdvizorStack's platform will access improved risk analytics, compliance monitoring, and operational efficiencies. The partnership will focus on developing advanced risk analytics using predictive modeling and machine learning, enhancing compliance oversight with real-time monitoring and automated reporting, and improving operational efficiencies through seamless platform integration and workflow automation.
Akhil Lodha , CEO of StratiFi, underscored the shared commitment to advancing the wealth management industry through technology and financial expertise. @Paul DeMaio, CEO of AdvizorStack, emphasized the productive collaboration between the two companies.?
“This partnership brings an all-encompassing Risk Analytics and compliance dashboard, enabling firms to ensure compliance effortlessly”.
?? Release, please.
Advisor360° , a SaaS wealthtech provider, introduced updates to its platform to enhance operational efficiency for financial advisors and firms.
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Notable features include a gifts and entertainment disclosure capability, which speeds up compliance processes by 90%, and an auto-aggregation feature for centralizing gift disclosures. These enhancements, along with others like multiple transfer of assets functionality, aim to improve advisor productivity and provide actionable insights for informed decision-making.
?? Bird’s Eye View
Let’s talk about the state of youth’s wealth in the States.
Since the pandemic, young Americans have seen a significant surge in wealth growth, outpacing older generations, according to research from the Federal Reserve Bank of New York .
Adults under 40 experienced an 80% increase in aggregated wealth since 2019, compared to 10% for those aged 40 to 54 and 30% for those over 55. The younger generations, though typically poorer, benefited from Covid-era fiscal stimulus, allowing them to invest in stocks, which surged during the period, despite their inherent risk.
However, despite this growth, the collective wealth of young adults remains substantially lower than that of older generations, with individuals under 40 holding just 5.7% of total US wealth as of 2019.
But not everyone’s wealth grows equally.
The headline answer from a new report by the McKinsey Institute for Black Economic Mobility suggests it will take Black Americans 320 years to catch up to their White neighbors' quality of life.?
This estimate varies based on location, with the longest catch-up period of 320 years found in stable rural counties and the shortest at 110 years in trailing rural counties. The report highlights disparities in quality of life for Black residents across different county types, indicating challenges in megacities and stable cities. However, the accuracy of these estimates relies on several assumptions, and trend extrapolations suggest that catching up may take even longer than initially projected.
It takes more than apps to improve the situation described above. However, financial advisors are not happy with the tools that are supposed to help them help their clients.
Recent research by Avaloq indicates that most wealth managers (70%) are dissatisfied or indifferent towards their current technology systems.?
A significant portion (45%) perceive their systems as outdated, while only 31% are satisfied with their modernity, and just 29% believe their technology aligns with their specific needs. Based on insights from 200 wealth managers across Europe and Asia, the study highlights challenges in technology adoption, including usability issues, complexity, and the need to manage multiple systems.
While these challenges persist, there's growing recognition of technology's potential benefits, particularly in areas like client onboarding automation and advanced data analytics. Wealth managers express a clear desire for technology enhancements, prioritizing features such as enhanced data visualization, automated regulatory checks, and portfolio monitoring.
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Sources: Bloomberg Wealth and Opinion , Investment News , and FinTech Global .