In the face of the global financial crisis of 2008-2009, large diversified investors suddenly confronted an uncomfortable reality.
There were fundamental questions they couldn’t answer in a complete, timely or accurate manner:
- Where can I see everything I own?
- How are my investments performing?
- Where am I most exposed?
- What should I do now?
This created enormous challenges for even the most sophisticated asset owners in navigating the crisis as it unfolded. Not coincidentally, the fintech company I lead was founded in the immediate aftermath of that crisis in 2009.
Now, 11 years later, we have reached $2 trillion in assets on our platform. This is of course a point of pride for us, but more importantly it reflects how the industry has changed since the last crisis.
Today’s market practitioners are empowered to navigate market volatility in a more data-driven and confident way than what was possible back then.
You Can’t Advise on What You Can’t See
In the past, using legacy systems and tools, advisors spent much of their time collecting and cleaning data to have even the most basic portfolio-oriented conversations with clients.
Also the growing interest in alternative investments — private equity, hedge funds, venture capital and real estate — has added significant complexity and risk for advisors to analyze and report on the full scope of their client’s portfolios.
Put simply — to advise on the entire portfolio, you have to be able to see it clearly and completely. This has never been more important as we experience radical economic, market and cultural changes.
Today, advisors can subscribe to portfolio management solutions that have always-up-to-date data for all client portfolios — across asset classes, currencies and custody banks, including historically cumbersome to manage alternative investments.
These capabilities empower advisors to have high quality conversations with clients to help navigate uncertainty and achieve specific goals and objectives.
The right technology platform is now a must-have for advisors to develop trusted relationships, provide timely reporting and in-depth analysis to enhance decision-making, and support intuitive yet powerful digital experiences for each client.
Building on a Critical Mass of Data
Beyond facilitating enhanced reporting and advice, we have now collected a critical mass of data which makes it possible to address another key need for wealth managers: accurately gauging investor sentiment.
We recently announced the Addepar Investor Sentiment Index, an index that tracks U/HNW investor sentiment based on U.S. equity transactions that our platform tracks daily, across more than 10,000 portfolios with a minimum of $10 million each in assets.
The market moves over the last several quarters have been at odds with economic and world news, and traditional investor sentiment readings have long been derived from surveys rather than real investment decisions.