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10 FinTech Trends Financial Advisers Should Be Aware of in 2018

Jeremi Karnell
Jan 8, 2018

The fintech industry is changing faster than many financial advisers are prepared for. Everything from cryptocurrencies to blockchain technology is transforming how financial services agencies and wealth managers serve the needs of their clientele. The sooner financial managers understand the changes that are happening in their industry, the sooner they can get out ahead of these changes in order to facilitate the needs of their clients. If you want to ensure your financial planning firm is ready for the future, pay attention to these top trends in the fintech industry in 2018.

1. Artificial Intelligence Algorithms

Expect to see an increase in wealth management firms using algorithms to aid their clients in making sound financial investing decisions. As AI-powered algorithms get smarter, there will be a surge in financial advisement firms integrating artificial intelligence into their wealth management practices. Watch for more companies like ForwardLane to offer AI technology specifically for the financial services industry.

2. Machine Learning, NLP, and Behavioral Patterning

Machine learning, NLP (natural language processing), and behavioral patterning is another trend influencing the future of financial planning practices. Companies like Essentia Analytics are already developing software utilizing behavioral science and machine learning to better understand investment patterns, market fluctuations, and their impact on sound investment decisions.

3. Under-Served Markets/Developing Nations

One hot trend every financial manager should be aware of is surging interest for financial advice and assistance in developing nations. From Lagos to Lahore, there is growing interest in companies reaching out to previously untapped markets. Expect this trend to continue, especially as blockchain technology plays an increasing role in the future of finance. Investigate financial services startups in this sector and you will be impressed by the variety of companies innovating in this space. If you want to grow your wealth management firm, consider tapping into this growing opportunity.

4. Cryptocurrency Asset Management

Crypto management is fast becoming a must-offer service for wealth management firms. If your financial services agency isn't already offering cryptocurrency advisement services, now is the time to start. While you may need to hire for this sector, the rewards will likely be worth the investment in specialized talent. If you are considering offering crypto asset management, the sooner you hire, the better. There is already stiff competition for crypto talent, with global companies increasing their cryptocurrency offerings.

5. Medical Risk Sharing

Medical risk sharing is another intriguing opportunity for financial services agencies. There is growing interest in this sector, especially with recent changes to the American health services industry. Investing in and sharing the risk of medical device and drug development is a new frontier for many financial advisers and their clients. This is not an area to be entered into lightly and without in-depth consultation with your wealth management's legal team.

Check out:

Sharing R&D Risk in Healthcare via FDA Hedges

New Frontiers in Pharma R&D Investment

6. Initial Coin Offerings

ICOs are a hot trend in the financial services industry, but not an investment area to pursue without heavy due diligence. There are already class action lawsuits happening in this area, so wealth managers would be advised to proceed with caution before offering ICO/token purchasing advice to their clients. If you choose to offer ICO investing as an option to your wealth management clients, consider using tools like ICO Watchlist to understand activity happening in this space.

7. Financial Services APIs

There is growing interest in developer APIs (application programming interfaces) specifically for the financial services industry. Look at companies like Hydrogen for a glimpse at what is happening in the APIs for financial advisers sector.

8. Cannabis Investing

Expect to see more interest in financial services related to the cannabis industry. With Canada soon to legalize marijuana as well as some U.S. states that have already legalized recreational marijuana, the need to invest wealth derived from cannabis sales will increase. Financial advisers legally prepared to tackle this market can expect to see a significant increase in clientele.

9. Crowdfunding Investing

Watch for more investment firms to dip their toes in the crowdfunding waters. Savvy investors looking to gain access to products funded via crowdfunding sites will increasingly be looking to their wealth management advisers for assistance. This trend is expected to grow as blockchain and crowdfunding are a wealth-making match made in heaven.

10. Financial Services Cybersecurity

With increased interest in blockchain technology and cryptocurrency investing, there is a growing need for highly specialized cybersecurity training and software for the financial services industry. Watch for significant growth in the financial services security sector as more firms explore previously uncharted territory.

Understanding how the fintech landscape is changing allows wealth management firms to prepare for the future. Financial services firms with a future-focused approach to business growth are destined to outperform other agencies clinging to the investment strategies of the past. Pay attention to the above-listed 10 upcoming fintech trends and your agency will be well prepared for a profitable future.

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