A global pandemic. Geopolitical tensions. Persistent inflation and economic slowdown. The past year has been challenging for investors.

Will 2023 be any better? Fears of recession in the United States are receding with record low unemployment. In Singapore, inflation indicators promise some easing.

This is in contrast to International Monetary Fund (IMF) forecasts that 2023 could be “tougher”. A third of the global economy could be in recession in 2023, it says, as major economies like the US, Europe and China slow.

Ms Jacquelyn Tan, head of group personal financial services, UOB, however, sees opportunities in the current market environment.

Despite an uncertain first half of the year, the second half of 2023 could have a more conducive backdrop for recovery in Asia and risk assets, as US Federal fund rates peak and China’s reopening spurs growth among Asian economies, she says.

Ms Tan adds: “Investing patterns have swung across both ends of the risk spectrum in a relatively short period of time over the last few years. Timely wealth advisory services are ever more essential during such volatile markets.”

Young, savvy and self-directed

Global consumer demand for wealth management services is expected to double in size from 2021 to 2030 to reach US$500 billion (S$663 billion), says US-based management consulting firm Bain and Company.

This could be a result of new customer segments from demographic shifts and the expansion of wealth globally.

Bain and Company predicts that worldwide, an estimated 250 million millennials and Gen Z customers – defined by the company as those born between 1981 and 2012 – will have an annual income of over US$100,000 by 2030.

This group of customers are digital-first, self-directed, and self-educated when it comes to managing their money, says the company’s experts.

And as digital investing and financial platforms become more accessible, such younger, tech-savvy investors will gravitate towards investing and managing finances on their own.

UOB alone saw a 46 per cent increase in new customers on its mobile banking app UOB TMRW (pronounced as “tomorrow”) and online banking platform for wealth management services in 2022.

Humans in a digital world

So where do human advisers fit in? “We observe that customers still value human interactions when it comes to big-ticket transactions and more complex decisions,” says Ms Tan.

“To address these needs and engage with customers in a highly personalised way, UOB leverages a hybrid and omnichannel model.”

The bank’s omnichannel strategy features a blend of people and technology. It has digital services for those who are comfortable managing certain wealth solutions on their own, and wealth management advisers available to provide enhanced personalised advice.

For example, customers can monitor their investments digitally through UOB’s omnichannel wealth management platform, while having access to personalised guidance from wealth advisers on the same platform.

This can create a new level of convenience for fast-paced digital native customers, says Ms Tan, and bring renewed efficiency to the future of wealth management.

As millennials and Gen Zs accumulate their wealth and re-prioritise their personal commitments over the years, they may have less time to monitor their portfolios closely, notes Ms Tan.

And while there is an abundance of information available on the Internet, not everyone has adequate financial knowledge to sieve through and assess all of it.

“This is when they will find a wealth management adviser essential in their investment journey, helping them cut through the noise and identify relevant insights for their portfolio,” says Ms Tan.

Engaging a wealth management adviser can also help investors further maximise the performance of their portfolio by bridging gaps in knowledge.

She explains: “For example, many investors might not have a full picture of their overall financial health across various financial institutions before rebalancing their portfolio. Some may also make hasty decisions during market distress, when emotions and negative sentiments are at play.

“Even in bull markets, seasoned investors can find it challenging to identify opportunities to take profit or re-enter markets.”

More personalised wealth advice

Navigating the world of investing is not easy, especially when markets are volatile. How do you tell if your investments are keeping pace with the evolving market?

To help clients manage their wealth and make sharper investment and portfolio optimisation decisions, UOB’s advisers are equipped with an in-depth digital investment advisory platform, called the UOB Portfolio Advisory Tools.

The platform, which was developed by the bank, comprises three complementary tools: Portfolio Tracker, Insights and Explorer.

“These tools are built on UOB’s proprietary risk-first approach to wealth management, which helps you ensure that the risk you take is aligned with your risk profile and your financial goals,” Ms Tan says.

The bank’s risk-first approach supports clients in taking the appropriate amount of risk in their wealth journey – first protecting the wealth they have accumulated before building and enhancing their wealth according to their risk appetite.

Over 90 per cent of UOB’s client advisers and specialists use the Portfolio Advisory Tools.

Last June, UOB enhanced its Portfolio Advisory Tools by incorporating the Singapore Financial Data Exchange (SGFinDex) onto it. “We are proud to say that we are the first bank to have done so,” Ms Tan adds.

SGFinDex, launched in 2020, is a digital service which lets users view their finances held across different government agencies and financial institutions on a single online platform of their choice.

It was jointly developed by the Monetary Authority of Singapore (MAS) and the Smart Nation and Digital Government Group (SNDGG).

“With this integration, UOB advisers are better able to understand customers’ aspirations and leverage data-driven insights to provide holistic financial advice centred on their priorities,” says Ms Tan.

The platform’s tracker can now monitor the customer’s overall wealth position in real time, displaying gains and losses across various financial institutions.

Meanwhile, the interactive explorer tool enables the bank’s advisers to adjust their clients’ portfolio positions from a selection of over 900 funds and bonds, to find the most suitable portfolio across risk and performance parameters.

The insights function showcases the shift of their investment positions after taking their adviser’s recommended solutions. It also helps to perform risk analyses such as portfolio stress-testing against user-defined significant market events.

“These tools enhance the quality and timeliness of wealth advice that our advisers deliver to our clients, so that their wealth goals can be continuously achieved through changing market cycles,” says Ms Tan.