Managing Money Better: How wealthtech startups create a roadmap for millennials – YourStory

In the last 100 years alone, technology has transmogrified global finance. It is now possible to transact with almost any entity in the world and have that transaction processed in a matter of seconds. Furthermore, with cryptocurrencies in the picture, the number of alternatives has only increased in the recent years. All of this technology, despite having unlocked many possibilities that were until recently considered impossible, does come with a downside: complexity.

As societies slowly, but surely begin to drift away from paper-based currency and coins, its denizens run the risk of having yet another layer of separation between them and money. As people start to lose the ‘feel of money’, it is only natural for them to be mystified when it comes to the age-old exercise of wealth building.

Fortunately, this mystification can be solved yet again, via technology. Here are some of the ways through which ‘Wealthtech’ firms can work with millennials to aid in their long-term wealth-building efforts.

Removing decision fatigue

Ask any young person today about investing, and chances are that they will express concerns about not knowing where to start investing. With a plethora of platforms that promote investing in everything from gold to wine, millennials are spoilt for choice, and more often than not, results in decision paralysis.

Wealthtech firms are uniquely positioned to address this issue as they combine the expertise garnered from the yesteryear paradigms of high finance, with the cutting-edge technologies of today. By reducing the clutter and clarifying some of the many questions that plague millennials, these firms are finding success in helping young, first-time investors choose their preferred platforms and vehicles of investment.

Portfolio diversification

Not too long ago, famed investor Michael Burry had claimed that global financial markets were witnessing one of the ‘greatest speculative bubbles of all time’, much of which was attributed to the meteoric rise of technology stocks at that time. This is quite an easy trap to fall into and can often result in massive wealth erosion as the bubble pops. Ensuring this does not happen would mean that millennials will have to know how to diversify their portfolios to protect them from such shocks. Once again, wealthtech can help here.

Many such firms, especially in India, are being run by individuals who belong to the old guard of finance. This means they are more likely to take conservative calls and follow sound investing practices, which is a boon for young investors today. By imparting solid financial advisory services in these times of volatility and aggressive upselling of dodgy assets, wealthtech firms protect millennial investors from being swayed away by modern-day Ponzi schemes.

Nudging for emergency funds

The explosion in credit …….