JPMorgan unveils IndexGPT, Revolut launches crypto exchange, and more — WealthTech Fusion, 10 May.
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What’s in:
This time, the start of our digest spotlights Northern Trust bank’s awards.
The Wealth Tech Awards, presented by The Financial Times and PWM , have recognized Northern Trust with top honors in two categories: Best Private Bank in the US for Digital Wealth Planning and Best Digital Innovator of the Year in the US.
These awards highlight Northern Trust's stand-out commitment to technology innovation in wealth management, focusing on enhancing client experience, operational efficiency, and investment outcomes.
Steven Fradkin , President of Northern Trust Wealth Management, emphasized the company's customer-centric approach: every decision at Northern Trust is made with prioritizing their client and advisor needs at the forefront.
With a focus on innovation, Northern Trust has implemented new technologies and streamlined processes, resulting in improved client engagement and faster response to feedback. The company's holistic wealth management services and innovative approach have solidified its position as a leader in the industry, with $420.6 billion in assets under management as of March 31, 2024.
⚡️ Release, please
JPMorganChase introduces IndexGPT, a thematic investment tool powered by OpenAI 's GPT-4 model.
IndexGPT automates the creation of thematic indexes by generating keywords and scanning news articles for relevant companies. While not revolutionary, the tool reflects Wall Street's growing interest in AI-driven solutions to tap into investor trends.
Rui Fernandes , JPMorgan's head of markets trading structuring, sees IndexGPT as the first step in a broader integration of AI across the bank's index offerings, aiming to offer a more efficient and comprehensive approach to thematic investing. Despite thematic ETFs facing challenges, Fernandes believes IndexGPT's ability to generate a larger number of keywords provides a superior representation of themes, appealing to institutional clients seeking exposure to emerging trends.
JPMorgan initially filed for the IndexGPT trademark to protect intellectual property but has been experimenting with AI and working with regulators to ensure proper controls are in place. The launch follow last month’s debut of the banking giant’s new digital media business, allowing advertisers to target the Wall Street bank's 80 million customers based on their spending data.
Revolut has entered the cryptocurrency market with Revolut X, a specialized trading platform for retail customers in the UK.
This platform offers trading for over 100 cryptocurrencies, including popular options like Bitcoin and Ether, with plans to expand its offerings. With fixed fees of 0% for makers and 0.09% for takers, Revolut X aims to compete with major exchanges while providing easy access and minimal user fees.
Revolut X targets seasoned crypto traders but is available to all UK users with retail accounts, allowing seamless trading between cryptocurrencies and fiat currencies. The platform emphasizes security, with customers' digital assets held 1:1 and stored mainly in cold storage.
Despite previous regulatory challenges, Revolut's launch of Revolut X signals a renewed focus on cryptocurrencies, demonstrating the company's evolution from a money transfer service to a major fintech player with over 40 million users worldwide.
🙌 WealthTech Cahoots
Advisor360° partners with GWN Securities, Inc., a national broker-dealer and investment advisor, to develop a new tech platform for its advisors.
Advisor360's account opening and wealth management tools will let GWN boost growth and advisor retention. The partnership offers GWN advisors access to Advisor360's account opening, advisor experience, data and reporting, and client portal modules. The platform streamlines multi-custodial account opening and provides a fully integrated advisor desktop.
Additionally, GWN Securities introduces a client portal with wealth planning tools and access to insurance and investment products, enhancing online collaboration with investors.
Mike Fanning, who assumed the role of Advisor360's CEO in April, highlights the focus on productivity and fast, high-quality data to accelerate GWN's growth.
Recommended by LinkedIn
Global investment company abrdn and wealth management platform FNZ Group have joined forces to introduce a new digital wealth platform in Singapore.
The platform is designed to cater to various financial institutions across the region, including advisory firms, banks, and family offices, aiming to enhance investment advice quality and client outcomes. It will offer both discretionary portfolio management and self-directed options accessible through advisor and client portals, with plans for future innovations.
The launch marks the beginning of the companies’ strategic partnership in Asia building upon their successful collaboration in the UK, where they manage £75.2 billion in assets through a financial advisory platform. With the Asia Pacific region poised to surpass the US in financial wealth by 2025, abrdn and FNZ are committed to delivering tailored solutions to meet the evolving needs of investors in the region.
💸 Funding & Investment Updates
fundcraft , a digital infrastructure provider for asset management, has secured €5 million ($5,4M) in Series A funding.
The round was led by Aperture® Venture Capital and SIX Fintech Ventures. The funding will fuel product development and support international expansion efforts to meet the increasing demand for digital asset management solutions.
Fundcraft's CEO, Julien De Mayer , sees the investment as crucial for entering new markets and expanding their platform to accommodate additional asset classes, while CTO Victor Martin Garcia highlights the urgency for modernization within the industry. Aperture Capital, actively involved in Fundcraft's strategy, recognizes the transformative potential of its model in revolutionizing asset servicing.
Founded in 2021, Fundcraft aims to modernize fund administration by offering a centralized platform that automates processes and reduces costs. With this funding and strategic partnerships, Fundcraft aims to disrupt the asset management industry with its technology-driven solutions.
💼 Leadership Reshuffle
Nepsis, Inc. , a Minneapolis-based investment and financial advisory firm, has appointed Amanda Butler as its first CTO.
Butler, a consultant for Nepsis for over a decade, will lead the firm's tech strategy, manage its technology vendor partnerships, and expand its technology stack. With over 20 years of experience, including 15 years at Mosaik Consulting, Butler brings expertise in architecture and data modeling to Nepsis.
Her appointment reflects Nepsis' commitment to enhancing advisor and client support and improving operational efficiency. This move follows a trend in the WealthTech industry, as other firms have also recently appointed new CTOs.
🦅 Bird’s Eye View
Private equity acquisitions of wealth management firms have surged in recent years, comprising around 78% of all wealth management M&A, Barron's says.
Sounds like great news. Is it, though?
This trend reflects private equity's interest in the stable revenues and high client retention rates of wealth management businesses. However, concerns arise about potential conflicts between private equity's profit motives and clients' best interests.
Private equity's involvement in wealth management often leads to operational improvements and scalability through acquisitions. Yet, the typical holding period of three to five years raises questions about the long-term stability of client relationships. Advisors may also face uncertainty about the ultimate home for their clients post-acquisition.
Despite these challenges, private equity ownership can bring benefits such as professionalization, enhanced governance, and access to capital for growth. It can also create liquidity opportunities for partners and owners, extending the firm's longevity beyond its founders. However, advisors should carefully consider the implications of private equity involvement on client experience and firm culture.
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Sources: FinTech Global, BNN Bloomberg, InvestmentNews, Fintech News Singapore, Business Wire, FinTech Futures, and Yahoo Finance.