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Three Unstoppable Forces


Three powerful forces are re-shaping investment and wealth management.

First, the digital revolution extends from internal, driven by the need to improve operational efficiency, to external, fueled by growing demand for digital engagement by all actors across the value chain. In the age of the cloud and ubiquitous apps, it no longer cuts it to build products, cover clients and provide after-sales service with tools developed in the late 90’s / early 00’s.

Second, money management is inexorably going systematic. Factor investing, smart beta, quant indices and robo-advisors are all part of this trend, along with the growth in ETFs as investment building blocks. It does not mean all investment managers and advisors will end-up being replaced by machines and that active management is dead. It means that the traditional lines between quant and fundamental on the one hand, and active and passive on the other, are blurring. Quantitative techniques are becoming an increasingly important item in the toolkit of all financial professionals. To use an analogy from a different industry, would you imagine boarding an airplane that has no autopilot? Science and technology made flying safer and more reliable. Everybody should welcome a similar trend in asset and wealth management. For those afraid of losing out to machines, one should take comfort in the fact that there is still a pilot in the cockpit, and it will be so for a while. It is time to seriously embrace the systematization of money management and harness it to produce better outcomes for clients and other stakeholders. This can be done without drowning in the smart beta alphabet soup or getting lost in the factor zoo.

Third, the primacy of personalization dictates that one product for all is no longer sufficient. End-investors increasingly demand custom beta vs bulk beta, personalized solutions vs mass-marketed products and bespoke strategies vs standard offerings. It goes without saying that the financial profile of a senior corporate executive is very different from that of a doctor or university endowment. Investment solutions must reflect these differences and go beyond simplistic low/medium/high risk categories. For example, environmentally-minded clients will prefer portfolios that are negatively correlated to the price of coal or crude oil. Yet such links are rarely measured, let alone shown to end-investors, today.

These forces are at play against the backdrop of a changing regulatory landscape, with MIFID II, in particular, taking considerable mind-share away from other strategically important matters.

Generating demonstrable performance and providing differentiated service requires new tools and new thinking. We are seeing firms small and large re-think the way they design products, manage portfolios and serve clients. A movement has started. Its aim is to harness the tectonic shift towards digital and quant in order to combine the best of human and machine and offer truly personalized investing.

We built our modular rule-based investing platform precisely for this purpose. For a more detailed discussion on object-oriented investing and how it can help you secure your competitive edge, contact us at

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