Wealth-tech and the power of apps

Welcome to the second issue of Money Minutes. In this month’s issue, we’re talking about how wealthtech has changed over the last few years and what it means for us as users. And of course, my personal finance favourites for the month.

Wealth and wealthtech

A new study from App Radar found that downloads of wealth building apps increased by 40% in the UK between 2020 to 2021. But what does that exactly mean?

It means that not only did more of us turn toward tech in our journey to invest, but that the Fintech industry has certainly made it easier for us by growing and innovating with each week that goes by.

But why use an app to manage your wealth? And what is wealth these days?

What is wealth

According to Google, wealth is:

an abundance of valuable possessions or money; “he used his considerable wealth to bribe officials”

And in the context of wealth management, it’s historically been the wealth of affluent or high net-worth individuals.

But the definition of ‘abundance’ can be quite wide, in my personal opinion. Abundance can simply be having more and more left in your bank account after your monthly spending, and in effect, not living payslip to payslip.

Abundance could be having a positive net worth (what’s left after you take away your negatives from your positives).

I believe this is abundance because it’s only with this extra money that you can then choose to start to save, spend or invest.

And with wealthtech, you have the option to invest with very accessibly low amounts. Apps (or platforms) like Plum and Hargreaves Lansdown let you invest with £1. So building wealth, and building abundance, isn’t only for the affluent or the HNWIs (high net-worth individuals).

The rise of wealthtech

The most common excuse we give ourselves—especially when attempting something new—is that we’d have to open an account somewhere, or go through the decision fatigue of picking a platform to invest with in the first place.

Wealthtech apps make this super easy: simply download, upload your identify verification information and manage your investments right from your phone.

And not only is it this simple, but the tech involved can now include robo-advising, personalised services and some even offer financial coaching as a USP.

There is less demand for a separate, in-person financial advisor, as equally as financial advisors can more easily find ways to target and service potential clients.

There’s also a completely different demographic downloading and using these apps. It’s no longer an area of advice just for HNWIs and a lot more accessible.

And no doubt with the growth of wealthtech, will come the increased scrutiny on what happens with our data once we open these accounts and get financial advice based on our deepest desires and growth strategies.

Do you use a wealth management app—is your stocks and shares ISA in an app? How do you define wealth? Is data privacy a concern to you?

Personal Finance Favourites

Some favourites of mine spotted this month…

  • Nationwide’s FlexDirect current account is offering a 2% interest rate for the first 12 months, available to new and existing customers – only on balances up to £1,500 and you have to contribute £1,000 a month into the account
  • Virgin Money’s mPlus current account is offering a 2.02% interest rate as well, but only on balances up to £1,000
  • AI powered money management apps — things like Plum, Moneybox, Emma, Money Dashboard and many others. The power of the algorithms built into these apps are transformational in reducing the amount of legwork you’d have to do in figuring out your good and bad money habits. Give one of these a try using a free trial and see if you uncover anything unexpected!
  • With the increases in gas and electric bills as of today, I’m going to be exploring a new provider and this means maximising on cashback. I use TopCashback in doing research for this
  • Qatar airways now accept and work with Avios! New members to their frequent flyer program ‘Privilege Club’ can earn 5,000 Avios when booking any flight that’s marketed and operated by Qatar Airways by 30 September 2022

That’s it for this month, folks—I hope you enjoyed this issue. See you in a month!

Leave a Reply

Your email address will not be published. Required fields are marked *