There’s no question about it: the rise of fintechs is changing the financial industry.
At OSC Dialogue 2016, experts discussed how the growth of such firms impacts both advisors and regulators. Two key concerns are how robos should be regulated and whether changes in consumer behaviour will affect advisors’ client relationships.
And the pressure’s not going to let up any time soon.
Randy Cass, founder of Nest Wealth, noted during a panel discussion that traditional firms used to say “no one [will] sign up to have their money managed online.” But now, those same firms are looking for advice on how to leverage new technology and meet clients’ needs.
Further, digital wealth firms are gaining market share across the globe, said Mark Wiedman, global head of iShares for BlackRock, during the same panel. He’s seen similar trends in the U.S., China and Australia, and says fintech growth is “changing the way investors interact with the people who their manage money.”
In his view, the emergence of such firms is a bigger disruptor than the growth of mobile banking. And, in coming years, Wiedman predicts more traditional firms will need four things to adapt and survive:
- strong brands;
- scale;
- adequate capital; and
- the ability to meet evolving regulatory requirements.
Then, during the keynote discussion about how regulators are dealing with industry transformation, Securities and Exchanges Commission Chair Mary Jo White noted digitial wealth managers are better positioned to serve investors who have fewer assets. But, she added, robos should be held to the same standards as traditional firms, so figuring out how to oversee them is critical.
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