Core Features of Wealth Management Software for Investment Professionals

Operating in the modern investment market is challenging, especially for investors with growing and diversified portfolios. Investors have to spend a great deal of time and effort on managing and monitoring portfolios, as well as processing vast amounts of data to make more reasonable investment decisions. Additionally, investment advisory professionals have to manage client relationships, which is also exhausting.

To handle an increasing business complexity, an investment professional can implement a wealth management platform, choosing between purchasing it or building one from scratch with the help of one of the wealth management software companies. Such software provides numerous useful functionalities, ranging from portfolio management to investment analytics capabilities.

This article highlights four software capabilities investment professionals should consider when deciding which solution to purchase or develop.

Portfolio monitoring and management

Consolidating financial data across different sources is a key capability that a wealth management solution can offer. For instance, a solution providing API-based integration can aggregate data from multiple investment accounts across numerous trading platforms. Then, the solution can pull this data into a single dashboard, thus enabling investment professionals to gain a unified view of their portfolios and enhance transparency.

Wealth management software can also include tools for portfolio performance analysis, enabling investment professionals to assess the overall performance of bonds, stocks, commodities, or other investments. It can allow a specialist to track various portfolio performance KPIs, including capitalization rate, turnover ratio, return on equity, or other metrics. A solution can also provide tools for comparing and benchmarking the performance of multiple portfolios or holdings to assess portfolios against market performance standards.

A wealth management solution can also help automate many repetitive activities, such as extracting data from imported financial statements or generating performance reports to streamline professionals’ work significantly. Software that is complemented with AI can provide more advanced automation and help optimize high-value tasks, such as purchasing and selling assets in a portfolio (an AI algorithm can do it automatically based on rules defined by an investor and market data analysis).

Risk management

Additionally, wealth management software can help investors identify and analyze various types of investment risks to manage them more efficiently. For instance, it can provide tools, such as the Sharpe ratio calculator for calculating the return on an asset based on its volatility or the Sortino ratio calculator for assessing the return on an asset based on its downside volatility only.

Also, a wealth management solution can provide scenario planning functionality, enabling an investor to foresee how the value of their portfolio would change in response to different events, for instance, when market or geopolitical conditions are shifting. This valuable financial planning tool empowers an inventor to test various investment strategies and foresee their returns considering potential risks.

Client management and engagement

If investment advisors have to manage relationships with different parties, such as customers or partners, they should look for a wealth management solution with CRM functionality. After all, a robust wealth management solution with built-in CRM capabilities enables a professional to connect with prospects, clients, and peers more efficiently and build strong working relationships.

To be more specific, such a solution can provide contact management functionality, helping store and organize customer or partner data better. At a basic level, for instance, it can enable an investment advisor to group different contacts within a contact base and find the right contacts faster, thus streamlining communication with clients and peers.

A more advanced CRM functionality enables an investment professional to associate contacts with specific tags related to their preferences and areas of interest. These tags can be used later to send targeted emails and enhance customer or partner engagement.

A solution with built-in CRM features can also provide an investment professional with an overview of all interactions related to this or that contact, including sent or received emails, calls, and past meetings. By checking these past interactions, an investment professional can personalize communication and services more efficiently.

Additionally, a wealth management solution can automate different CRM workflows to help an investment advisor spend more time on financial planning or any other critical activities instead of clerical routine tasks. For example, it can include the functionality for automating Know Your Customer (KYC) or Anti-Money Laundering (AML) checks for new clients to identify their associated risk.

Data analytics

Wealth management software can offer various analytical tools, among other things. For example, a solution can help investors analyze various aspects of their portfolio, including the degree of diversification based on asset class allocation, geography, and investment sectors.

Additionally, the software amended with the stock analytics capabilities helps an investor foresee market dynamics and trends and forecast prices for specific stocks. All these capabilities can help a professional make more intelligent trading decisions.

What is more, wealth management software can provide investment professionals with a range of customer analytics tools. With their help, a specialist can analyze customer interactions and research client behavior and preferences to personalize services better.

Final thoughts

Wealth management software can make an investment business more manageable and efficient. Solutions of this type can provide private investors and financial advisors with a variety of useful functionalities, ranging from portfolio monitoring and management to risk management, analytics, and CRM. Increased productivity, enhanced decision-making, and better customer engagement are some advantages investment professionals can gain by implementing wealth management software.

However, choosing the right wealth management solution that aligns with specific business needs and requirements can take time and effort. In such a case, developing wealth management software from scratch can be a preferable option, which can be done with the help of third-party software developers. A software development company can run the analysis of an investor’s business, help define functional and non-functional software requirements, and build an efficient and tailored solution based on them.