Expertise in and beyond portfolio and risk technology

A strong technology partner has a symbiotic relationship with wealth managers and shared goals for progressing their businesses. There should also be an understanding of the specific needs of those businesses, such as knowledge of local regulations or the nature of advisor/end-client relationships in wealth management.

Let’s dive into three attributes of what we think a strong partnership looks like for wealth managers. 

1. Speedy responses to major market events

Global markets may go through daily swings, and there are time periods when uncertainty increases. As wealth managers’ clients start to ask more questions, regular monitoring becomes even more important to decide if portfolio adjustments need to be made.

Sophisticated risk analytics can help wealth managers understand their book of business in uncertain markets. Pairing that with insights from expert analysts can provide even greater transparency when markets are under stress.

Let’s look at the Russia/Ukraine conflict as an example, which started a war that has had ripple effects on markets across the globe. It also started at a time when markets were already under stress from the global pandemic. Wealth managers reached out to the Aladdin Wealth™ team for help in making sense of the situation.

Our analysts quickly uncovered that there were 7,329 funds totaling about USD $10.5 trillion AUM that had exposures to securities from Russia or Ukraine, or both. Of these funds, 127 had greater than 25% to Russian securities, and 1,762 had Ukraine-domiciled securities. Based on this, we swiftly updated the functionality in the Aladdin Wealth™ platform to make it easier for wealth managers to understand whether their end clients had any portfolio exposures that would be directly affected by the geopolitical conflict.

We then followed that up with contextual education on understanding portfolio exposures. Although it’s normal to feel uneasy about whether a war could affect portfolios, it’s helpful to keep in mind that many investors tend to invest in domestic securities. In most U.S. portfolios, for instance, less than 1% of the average investor’s overall portfolio was directly impacted by the war, and that insight helped advisors put the geopolitical climate in perspective for many clients’ longer-term investment horizons.  

2. Personalized support to better understand the data

Technology platforms can be complex.

Our platform includes 3,000 risk factors, providing comprehensive coverage for wealth managers who are managing hundreds of different client portfolios comprised of various assets. It provides high levels of transparency into risk exposures that can impact portfolios.

Wealth managers and their advisors can use these factors to analyze portfolios in a variety of ways that suit their clients’ needs, including the ability to gain transparency into the risk behavior of non-traditional assets like structured products.

But in some situations, wealth managers need a very particular set of information, and our teams are there to discuss which factors can have the greatest impact. That’s when a strong partnership can help them get what they need faster than the technology alone.

For instance, a wealth manager wanted to understand what risk factors to focus on as financial conditions tightened. We identified eight risk factors as leading indicators to help address their specific needs quickly and precisely.

3. Educating users and sharing best practices in real time

Sometimes, wealth managers’ needs aren’t specific to the data or analytics. We’ve seen increased requests for broader education among our wealth managers and their advisors. Advisors are eager to consume more information that can help them enhance their client conversations and grow their book of business.

Sharing important observations we see – in the markets, in portfolios, in our tools – helps wealth managers make the most of their time with clients. For instance, fixed income conversations popped up more in a market backdrop of inflation pressures and interest rate hikes. Central banks around the world had already rolled out or signaled tightening strategies. In an uncertain future for fixed income markets, wealth managers wanted more knowledge.

Our client engagement and analytics teams created education resources to show advisors how they can stay one step ahead on tough conversations about perceived “safe haven” bonds by evaluating risk exposures, and how advisors can use technology to present that simply to clients through the risk factor decomposition capabilities on our platform. 

Risk factor decomposition enables advisors to see clients’ risk exposures within fixed income allocations, individual bonds or a combination of funds. We showed wealth managers how they can emphasize the ways they’re guiding clients through difficult market environments, rather than trying to predict how markets are going to move. This enhanced client conversations, rather than making the discussions about explanations of unpredictable events. Education alongside technology fosters a stronger experience for advisors, and ultimately, their clients.

The Aladdin Wealth™ Experience

The Aladdin Wealth experience includes expertise every step of the way.

Partnering with experts across a range of subject matter knowledge

Now that we’ve discussed what a strong partnership looks like, who are those partners on the Aladdin Wealth™ team?

We have teams with a variety of expertise, so we can get wealth managers the information they need when they need it. Our Aladdin Wealth™ subject matter experts span risk analysis, portfolio construction, integration and adoption. Wealth managers can also call on BlackRock’s range of experts across investment asset classes and global markets.

We understand that supporting wealth managers on analyzing risk and constructing portfolios are important parts to their days, but not the only aspects of their work.  The platform they use has to be functionally and sufficiently integrated into existing technology and teams to be effective.

Implementation resources and experts help embed the tech fully into workstreams that will be most helpful to each individual professional. From financial advisors managing portfolios for several end clients to an executive making decisions about a wealth management business, the technology meets specific needs of each role. 

We also provide adoption resources to connect the technical aspects with the marketing and client-building aspects of what wealth managers do. We help wealth managers get more out of their technology with additional education, content and conduct trainings for how to use the platform or new enhancements.

Technology partners who care about your growth

As a partner, we understand each wealth manager’s needs.

Long-term partnerships with wealth managers have two-fold benefits. Wealth managers help us foresee wealth management industry changes, so we can build and provide innovative software and services that lead to mutually successful outcomes.

With more foresight, wealth managers can transform their businesses.