Press Release
Findings from a new free report into Digital Wealth Management



London, October 12th 2021: Total fees generated from digital assets under management will reach $12.6 billion by 2025, a more than threefold increase on the 2020 figure of $4 billion, according to fintech and payments research specialists Kaleido Intelligence.

According to Kaleido’s new report, Digital Wealth Management Strategies & Forecasts 2021, US digital wealth managers currently dominate the space (the five largest players all cater exclusively for US clients) and, with AUM (assets under management) exceeding $700 billion in 2020, accounts for nearly 85% of all digitally managed assets. This dominance is expected to continue for the foreseeable future: even by 2025 the US is expected to account for around 71% of robo-managed funds, with over $2.1 trillion under management.


Build, Partner, Acquire

As the digital AUM of fintech companies began to grow, so too the traditional players perceived that, as in banking, the pure-plays were likely to cause significant disruption, potentially erode their existing client base and attract the lion’s share of younger potential customers. The report identifies three broad approaches which wealth management firms can adopt in response.

  • Build a digital offering in house which can then be integrated with a firm’s existing offering.
  • Partner with a specialist fintech platform provider which will perform the integration and potentially manage the digital offering on behalf of the wealth manager.
  • Acquire a specialist platform provider whose activities will either be integrated into a wealth manager’s existing offering or exist as a standalone brand.

Changing Audience, Changing Priorities

The report also emphasised the need for wealth managers to understand, and respond to, the fact that not only will millennials seek to interact with them increasingly via digital channels, but that their expectations and demands from funds will differ significantly from their predecessors.

According to report author Dr Windsor Holden, Principal Research Consultant at Kaleido Intelligence: “There is a far greater awareness of environmental issues and a related desire to invest in “green” or socially responsible funds, as well as in technology funds. Similarly, there has been a paradigm shift in goals, needs and lifestyles, which will need to be recognised by the wealth managers so that they can present appropriate investment options.

Investment Soaring into Wealth Management Fintechs

Kaleido estimates that over the past decade, approximately $4.6 billion has been invested by VC firms into robo-advisory fintech platforms, of which $1.8 billion has been invested since June 2020. One company, the Canadian startup Wealthsimple, accounts for 19% of all VC investment in that time, including $610 million earlier this year.

JP Morgan Heads Digital Wealth Readiness Rankings

The report assessed the digital readiness of the 15 leading wealth management companies by AUM, scoring the players against indicators including the breadth of their digital portfolios, the scale of their fintech acquisitions and investment and the activities in key areas including artificial intelligence, blockchain and quantum computing.

Four companies were identified as Champion companies which have embraced the need for digital transformation, have committed to significant R&D in innovative technologies and have already deployed them at the backend or in customer-facing products, and have reached out to third-party partners across the ecosystem. JP Morgan headed the rankings, followed by Fidelity Investments, with Blackrock and Vanguard in joint third place.

About Kaleido Intelligence

Kaleido Intelligence is a specialist fintech and payments consulting and market research firm with a proven track record delivering fintech and payments research at the highest level. Research is led by expert analysts, each with significant experience delivering fintech research and insights that matter.

Contact our Press Team for interviews and research access:

+44 (0) 2039839843

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