The financial industry is undergoing a massive transformation that will ultimately benefit investors. That’s the view Fiona Frick, CEO of Unigestion, a Swiss-based asset manager, presents in a series of white papers on the state of the industry.
“In a period of robotisation of entire industrial processes, asset managers need to ask themselves what they can provide their clients that a robot, social media platform or algorithm cannot,” she says.
“Some companies, such as Nutmeg in the U.K., are already entering the area of online algorithms for asset allocation. Meanwhile, social trading platforms such as E-Toro are enabling investors to copy the trades of others and turning every online trader into a mutual fund.”
Frick disagrees with those who think robo-advisors armed with ETFs will spell the end of active management. “For many investors,” she says, passive vehicles are “not enough.” But to stay relevant, active managers must be prepared to change. “Without innovation, active products and processes run the risk of becoming commoditised or obsolete, or the victim of price wars.”