Transforming the Wealthtech Industry: Q&A with InvestCloud’s Jeff Yabuki
Rapid technological advancements are causing significant transformations in the wealth management business. Wealthtech has enabled the creation of personalized wealth management apps, enhanced financial planning, and strong asset management networks, prompting firms to offer more accessible, cost-effective, and personalized solutions.
Jeff Yabuki, InvestCloud Chairman & CEO and Nasdaq board member, shared his thoughts with Connect Money on the ever-growing connected wealth industry, the technologies that are having the most impact, and what significant changes he anticipates for the industry in the coming years.
Yabuki also discussed the Los Angeles-based wealthtech firm’s new strategic direction reflected in its new brand identity and the upcoming alternative investments product launch for wealth advisors.
CM: What was the motivation behind the rethink of InvestCloud’s brand identity?
JY: Expectations for hyper-personalization are fueling the digital transformation of wealth management. Structured and accessible data, the creation of unique insights, and the delivery of actionable intelligence for wealth management professionals and clients are essential to meeting that demand. This, as the $80+ trillion transfer of generational wealth accelerates, should provide additional opportunities, along with incremental technology needs, for all market participants, requiring a deeper level of connectivity than had not previously existed.
Our new brand identity, accentuated by our tagline – WealthConnectedTM – is a nod to the next generation of connected innovation, integration and intelligence from InvestCloud that will drive client experience, advisor efficiency, and further organic growth for its clients.
It’s designed to reflect our new strategic direction and capitalize on this market opportunity, as InvestCloud is combing assets in new ways, uniquely positioning us to create differentiated value for clients and advisors as we set our sights on enabling a smarter financial future in wealth management. As a global leader in WealthTech, our new brand identity reflects our unmatched leadership position and underscores our focus on innovation and leadership through this time of transformative opportunity.
CM: What is it about the connected wealth/advisor industry that creates such a promising growth opportunity?
JY: Structural changes in the market, such as a broader distribution of alternative investments, are mandating enhanced connectivity leading to enhanced intelligence that helps our clients enable smarter, more inspired experiences for advisors and their clients. This deeper, better-structured access to the data layer will be required to unlock the future potential of the transforming market. InvestCloud is uniquely positioned to deliver differentiated financial outcomes for our clients in this new era of innovation, integration and intelligence.
CM: What are the strategic priorities for your platform?
JY: For context, there are three important mega-trends in the macro market that informed our strategic direction:
· The $80+ trillion transfer of wealth to a generation with different relationship expectations, needs and, often, a focus on mission/purpose will require deeper integration of technology through the relationship and advisor workflows.
· The broader distribution and democratization of alternative investments which is in every industry participant conversation – and the fact that it will create new and more complicated opportunities for the market leading to a new level of connectivity that had not previously been required.
· An accelerating role of technology in our lives – financial and otherwise – spurred by AI, and particularly the potential of Gen AI across all business models including wealth.
The core pillars of our strategy are product innovation and differentiation, deeper client relationships and operational excellence.
· We’re looking at ways to bring our different assets together– to create unique value for our clients and their advisors to meet the evolving needs of customers – and to help them embrace new and meaningful opportunities.
· We continue to see the importance of personalization – hyper personalization – as a key element of the digital transformation of wealth management.
· And that requires data that is both consistently structured and accessible through our platforms.
· We will use data to create unique insights, which help advisors better run their business, deepen client relationships and improve outcomes for their customers through actionable intelligence. We think about that as Smart, which is one of our fundamental sources of differentiation.
We expect to use these strategies across our unique array of technological capabilities to deliver new and inspired experiences for the industry – including in the alternative assets space through the wealth channel. We are re-orienting our roadmaps and technology architecture and stacks to meet the promise of these unique value propositions for our clients, financial advisors and end-customers.
CM: Which technologies are having the most impact on the wealth management industry?
JY: It’s about turning data into intelligence – to deepen relationships and enhance effectiveness – including as we think about the potential to much further democratize alternative investments. The aggregation and analysis of data continues to be a driving force in our industry – with the added benefit of AI moving with both speed and to enable faster action and moving the market in new ways.
CM: How have these technologies enabled InvestCloud to launch new products?
JY: As we invigorate our road maps and accelerate our investments to support our new strategy, we expect to launch a series of new products over the next six months. At the same time, we are extending our technology foundation and architecture to allow us to move with the speed and certainty necessary in a transforming market.
CM: Tell us about your upcoming alternative investments product launch and how advisors will be able to use it.
JY: We will go live with a large client in Q4 with the first phase of holding alternative investments within our industry-leading managed account platform. Clients and advisors will be able to use our platform for managing these non-traditional assets on behalf of their clients in a discretionary account structure.
We believe the changes in the wealth landscape to increase access to alternative assets will require technology providers to deliver more integrated capabilities – and we expect to lead this effort for the market, enabling our clients to confidently capitalize on this important opportunity. Across our Digital Platforms, we are working with our clients to enable smarter experiences that allow advisors to best serve their clients in this growing category with deliverables over the next six months as well.
CM: What is impeding the digitization of certain wealth management firms?
JY: Digital demand is increasing daily, pressuring providers to make resource allocation choices. The time and resources required to invest in digital transformation is considerable and growing. Business leaders need to understand how the orchestration and implementation of new technologies translates to ROI. That is an area where a trusted partner like InvestCloud can play a key role by managing that journey from idea to implementation and activation.
CM: Looking forward, what significant changes do you anticipate for the wealthtech industry, and what advancements do you anticipate?
JY: The industry is going to be pushed further to hyper-personalize and deliver new experiences for their customers – both in terms of their relationships with their advisors as well as across digital relationships. This is the new era of innovation, integration and intelligence and will be critical for delivering on the rising expectations of advisors and their clients – requiring more data, more technology and more value.