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Big Tech’s Entry Into Wealth Management… What Does It Mean For Finance?

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You may have heard…

Big Tech is making a move into Wealth Management.

Well, I guess that was inevitable, especially as 69% of 1000 North American investors surveyed said they would trust Google, Apple or Facebook for wealth advice. 

This figure is even higher among Millennials and Gen-Zers. In fact, it seems the young ones would trust financial advice generated instantly by an algorithm twofold more than the guidance provided by a human face: 

  • Gen Z – 96%
  • Millennials – 79%
  • Baby Boomers – just 38%

Here is a wealth management consumer report published by Accenture.

According to Business Insider, a whopping 92% of wealth managers “fear” Big Tech disruption.

But let’s think about this. Where does this fear come from?

The way I see it, the main threat from Big Tech is their brand

Wealth and Money is already an area that conjures up a hesitancy among us – you’ve heard of Covid vax hesitancy, well Wealth & Money hesitancy has been around a LOT longer!

It’s a complicated relationship, people get nervous and freeze like deer in headlights and put off making decisions until it is too late. 

“Am I doing the right thing?” 

“Is wealth creation for people like me?”

“The big wealth management companies only cater for wealthy people and I’m not one of them…”

And so on… 

People don’t like feeling stupid. When conventional wealth management providers start using convoluted words like “diversification,” “asset allocation,” “risk tolerance” etc., it puts people off.

And, really, who can blame them? Where’s the appeal or attraction in “risk tolerance”?  


If a brand name that people trust and use every day, like Amazon or Facebook, were to suddenly come along and make Wealth & Money simple for people to understand, what would happen? 

If the likes of Google and Alibaba actually educate people instead of making them feel stupid, what would the response be?

Well, I reckon people, who normally wouldn’t dare consider wealth management, might feel as if they could take this first step because it would be with someone they are already very familiar with.

And trust.

Reference Reports:

  • Big Tech companies are positioning themselves into the wealth management market, however, Financial Advisor Magazine reports ways in which wealth management firms can stay abreast by offering more customised solutions.
  • Another report by Yahoo Finance releaved how financial advisors work with clients in the most recent COVID situation

It’s a bit like having Tesco providing your Mobile service or the Coop doing your funeral!

After all, for many people Big Tech is like a best friend, a loyal buddy they dare not lose touch with or their lives would be over.

Now, what if Big Tech went a step further and allowed people to use their tools and talk to each other and help each other using the resources – i.e. create a community – that really would be a game-changer. 

Rather than compete against one another, why don’t we help each other? That makes much more sense.

In fact, just recently, Google announced it was planning to deliver digital enablement for banks and providers of financial services, rather than Google “serving as the provider of these services.”

After all, if Big Tech were to launch their own financial services it would come into direct opposition with their own endeavours to sell B2B solutions. 

Would financial firms really want to partner with a platform that’s in competition launching its’ own offering? I don’t think so.

Instead, we have Google investing $1billion in CME Group (CME.O) a deal that sees the futures exchange operator’s trading systems move to the cloud in a 10-year partnership.

According to Reuters:

“The deal with CME marks a big win for Google’s cloud business, which competes against Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) for large, lucrative contracts from blue-chip Fortune 500 companies.”

In other words, the deal gives Google a “foothold” in the financial services sector, through its cloud facilities.

The “threat”, therefore, from Big Tech actually lies in the nature of their partnerships and the exact detail of them.

To my mind, wealth creation is inclusive, because sometimes it’s that one bit of information, that one golden nugget that you need to get to the next step, keep going and succeed. 

That comes from being part of a group, a family, a movement even. When you are part of a community, you help each other, are there to be supportive.

So, what could Big Tech offer, with their systems and processes?

I can’t see people jumping to have Amazon or Facebook as their wealth manager. But over time, they may become drawn to it for no other reason than they trust the brand

But some people will be open to having that first conversation. Which will then lead to the next step and so on until they do accept Amazon or Facebook as their Wealth Manager.

I have seen it first-hand. You probably have to. 

While using Amazon and being generally pleased with their systems and speed of service, I noticed that they were also selling groceries. 

Like many people over the past two years, when my normal provider was struggling to deliver during the Pandemic, I thought I would give Amazon a go. 

And it was the same system and speed of service as usual. 

So now I buy groceries, including fresh fruit and veg, from Amazon – who would have thought?

As for the “new generation.” They want things simple and they want things fast. They are open to using technology. 

The thought of having to organise a meeting and drive to see someone about the subject of money is anathema to them. They would much rather go online, fill in a form and have things done instantaneously. 

So, I think the newer generation will definitely be open to it. 

There will also be a different generation of people who are sick and tired of their wealth managers’ meagre returns, who don’t feel that properly served by them and so will be open to trying something new.

The only thing that the established industry can do is to appeal even more to those people who prefer more intimate relationships. 

People still buy from other people. One-to-one individualised service. 

This is something I don’t think the Big Tech companies will be able to offer that effectively, especially at the beginning, because they will probably focus more on systems and processes to get things done quickly and efficiently.

It won’t be easy for the “traditional” Wealth Manager.

The only way to compete with the “trusted” Big Tech brands will be to really rethink customer service, the relationship, being there for their clients, offer a highly personalised service. 

This might lead to higher costs but people will pay for that. Competing on price? Forget it. They won’t stand a chance. 

If it were me, I would create a personality brand, not a business brand, make it about the people. 

Be the brand that cares more, a trusted person who’s there for you and your family. 

Big Tech can’t compete on that level. 

And focus on the fact that you have deeper, more specialised knowledge. 

After all, you have been helping your clients for years, whereas Big Tech really does other things and is new to this. 

Can you really trust the person who sells you groceries to help you manage your money?

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