The top investment & wealth management firms to pay attention to in 2021
- The fintech industry is moving every year. Throughout 2019, fintech startups globally scooped up $34.5 billion in funding.
- But as more and more fintech companies pour into the space, it can be tough to sift through them and identify the largest fintech companies.
The sharp market decline in the early days of COVID-19, as well as the proceeding market volatility, has significantly impacted investors' portfolios. Wealth management firms' top lines were also effected, as net income and fees tied to assets under management (AUM) saw a drop consistent with market performance.
While backstop and contingency efforts have been used as an interim solution to market challenges, investors and wealth management firms must consider new approaches to avoid losing market share and to stay relevant long-term.
Vanguard had about $6.2 trillion in global assets under management, as of January 31, 2020. Vanguard is good for low-cost investing, with a $0 stock trading commission, making it ideal for buy-and-hold investors and retirement savers. However, active traders may require a more robust trading platform.
Robinhood offers free stock options, exchange-traded fund (ETF) and cryptocurrency trades, and its account minimum is $0. It is a great choice for those looking for low limits or trade crypto, but does not offer mutual funds or bonds.
Nutmeg launched in the UK in 2011 and offers investors a cheaper alternative to traditional wealth management services by focussing on exchange traded funds (ETFs) and tracker funds that carry lower charges. They also specialize in import substitution industrializations (ISAs) and pensions, and are ideal for those looking for someone to manage their portfolio and help them make tactical decisions.
Wealthfront launched the Wealthfront Cash Account in 2019, offering a 2.24% interest rate and FDIC insurance that covers balances up to $1 million. They offer a low 0.25% management fee, free management of accounts with balances under $5,000, and one of the strongest tax-optimization services to help those with taxable accounts enhance their tax efficiency.
Before launching in 2017, Hydrogen started as a product offering of consumer fintech company Hedgeable. Hydrogen launched as a standalone platform with the mission of allowing teams to deploy financial applications anywhere in the world.
Hydrogen has gained popularity due it's quick application process, straightforward website, and online-only approach that does not require clients to travel to a physical space. This is a good fit for more experienced investors, as some mortgage knowledge may be required and it is not ideal for those who have had debt issues in the past.
In contrast to services like Nutmeg and Moneyfarm, Scalable Capital has a minimum investment amount of £10,000, which has gotten them higher investments from the average client, but could scare away some newer investors.
Mint has impressive website and mobile app, which syncs with other accounts and categorizes transactions. Users can check their net worth, set budgets, and create goals. While there is no fee to sign up, users will encounter advertisements. In addition, some might have to adjust their settings to avoid frequent notifications.
More to Learn
This comprehensive list of fintech companies merely scratches the surface of the fintech industry, which is growing in unprecedented ways.
And here are some related Financial Services reports that might interest you:
- The Banking-as-a-Service Report, which looks at five major BaaS providers, ranging from fintechs to 20-year-old legacy providers that we think represent a proper cross-section of approaches to offering BaaS.
- AI in Banking, which identifies the most meaningful AI applications across banks' front and middle offices.
- The Global Neobanks Report, which explores how the neobank market has grown rapidly, and what's in store as the industry pivots from hyper-growth to sustainability.
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