Lecture 8-WealthTech and InsurTech
According to Robo Advisor class discussion, which of the following is a limitation of Robo Advising? A. No emotional intervention B. Innovation C. Lower Cost D. 24x7 accessibility
Answer - A - There is no dedicated personnel in robo advising and everything is automated.
According to lecture notes, which of the following is NOT a characteristic of WealthTech? A. Low Barriers to Invest B. Affordable Services C. Empower Customers D. No Intermediaries
Answer - D - No intermediaries WealthTech can have intermediaries. The 1st 3 are the main characteristics of WealthTech.
According to Lecture 8, which organization must robo-advisors register with? A. FINRA B. SEC C. FDIC D. FRB
Answer B: Robo-advisors must register with the U.S.Securities and Exchange Commission (SEC).
From the article "Deloitte: The Future of Wealth Management" Which of the following characteristics LEAST describes the kind of digital experience that investors have come to expect from their advisory firms? A. highly automated, frictionless, integrated, and collaborative B. human, modern, transparent, and trusted C. sentient, intelligent, and highly engaging D. efficient, precision and consistency
Answer D From the article Investors expect sentient, intelligent, and highly engaging, human, modern, transparent, and trusted; highly automated, frictionless, integrated, and collaborative to guide the development of compelling digital experiences for their clients.
From lecture 8, "Deloitte: The Future of Wealth Management" and lecture note, which of the following is NOT a major driver of changes in the wealth management industry? A. New products related to technical innovation B. Increasing digital proliferation among investors. C. Holistic goal-based advice D. Macroeconomic environment
Answer: D. According to reading, macroeconomic environment is a weak driver of changes in wealth management industry.
Which following is NOT a traditional wealth management service? a.Investment allocation strategies and security analysis b.Brokerage account management c.Retirement planning d.Robo-advisors
Answer: D. Robo-advisors are one of the Wealth Tech services.
According to lecture 8, what are the wealth management technologies? a.Robo-advisors b.Social trading c.Market Intelligence d.All of the above
D. All of these are the main wealth management technologies discussed in class.
According to lecture note 8, what is NOT the benefit of social trading? A. Buy and sell securities with very low entry barriers B. Allows investors to interact with one another and view other investors' trading activities. C. Social trading empowers individual investors to build and share investment strategies and portfolios with other investors. D. Manipulate the stock market.
Answer D. Social trading It is based on the idea that the collective talent of hundreds of more experienced traders is better than the talent of a single trader. A social trading network connects traders worldwide, enabling them to share their insight on what's happening in the markets - as well as what they are trading - in real-time. Social trading empowers individual investors to build and share investment strategies and portfolios with other investors; it also empowers individual investors to share their opinions and gain market insights from the opinions shared by the crowd.
According to Deloitte, which is low impact disruptors? A. The rewired investor B. New competitive patterns C. Holistic goals-based advice D. The macro-environment
Answer D. The investing environment has stabilized and recovered faster than retail investors anticipated, with several years of strong equity returns and real estate gains.
According to Lecture 8, which one is NOT one of the three largest robo-advisors? A. Betterment B. Wealthfront C. Personal Capital D. Robinhood
Answer D: There are an estimated 200 or so robo-advisors in the U.S. The three largest stand-alone robo-advisors are Betterment, Wealthfront and Personal Capital.
According to lecture 8, what kind of trading is it when: fintech firms provide platforms to allow traders to develop (code) and back-test new trading strategies without writing their own code from scratch? a.Algorithmic trading b.Fintech trading c.Back-test trading d.Theoretical trading
Answer: A. Algorithmic trading is the type of trading that fintech firms provide the platforms to allow traders to develop (code) and back-test trading strategies without writing their own code from scratch. You can write your own code from scratch in algorithmic trading, but most platforms already have the pre-written code and you just select the ones you want to use and edit them. All other answers are wrong and made up.
According to lecture 8, buying or owning half a share of a stock or less than 1 share of a stock is called? a.Fractional shares b.Half a share c.Semi shares d.Not possible
Answer: A. Fractional shares. You can buy and own less than 1 share of a stock and it's called fractional shares. Robinhood is an example of a broker where you can buy/sell/trade fractional shares of any stock. The availability of this feature helps promote financial inclusion, as more people or investors who can't afford to buy a whole share of an expensive stock can now own a fractional share of that expensive stock. All other answers are wrong.
According to lecture 8, what is it called the technology that: fintech firms use to help retail traders uncover trading opportunities based on technical and fundamental analysis? a.Signals generation b.Opportunities service c.Trading Maps d.Private detective
Answer: A. Signals generation. Generating trading signals help traders uncover trading opportunities based on technical and fundamental analysis. All other answers are wrong and made up.
According to lecture 8, how do wealth management firms make money? a.Charging fees for various services b.Stealing money from investors or whales c.Ponzi Scheme d.Betting against investors' trading positions
Answer: A. Wealth management firms make money by charging fees for various services. All other answers are either illegal or made up.
Which of the following description is correct for social trading? A. It provides automated, algorithm-driven financial planning services with little to no human supervision B. It is based on the idea that the collective talent of hundreds of more experienced traders is better than the talent of a single trader C. It provides platforms to allow traders to develop and back-test new trading strategies without writing their own code from scratch D. It helps harness technology to help retail traders uncover trading opportunities based on technical and fundamental analysis
Answer: B Social Trading is an innovative combination of social networks and online trading. It is based on the idea that the collective talent of hundreds of more experienced traders is better than the talent of a single trader.
According to lecture 8 notes, which of the following statements is true regarding Robo-adviser 3.0? a.Robo-advisor 3.0 focuses on keeping costs low by offering algorithm-based advice, recommending trading of passively managed ETFs or direct indexing of stocks. b.Robo-advisor 3.0 applies sophisticated risk management and profiling questionnaires to provide direct investments via self-learning artificial intelligence (AI). c.Examples of Robo-advisor 3.0 include Alpha Architect and Wealthily. d.Robo-advisor 3.0 offers more sophisticated trading strategies and analytics.
Answer: B is correct. Robo-advisor 3.0 applies sophisticated risk management and profiling questionnaires to provide direct investments via self-learning artificial intelligence (AI). Answer A is incorrect. It is Robo-advisor 1.0 which focuses on keeping costs low by offering algorithm-based service. Answer C is incorrect. Alpha Architect and Wealthily are examples of Robo-advisors 2.0. Answer D is incorrect. Robo-advisor 2.0 offers more sophisticated trading strategies and analytics, such as alpha generation/smart beta strategies.
According to the Deloitte reading, what are the high-impact disruptors for the Wealth Management industry? 1. The rewired investor 2. New competitive patterns 3. The macro- environment 4. Science- vs. human- based advice 5. Holistic goals- based advice A. 1, 3, 4, 5 B. 1, 4, 5 C. 2, 3, 4 D. All Above
Answer: B. The high impact disruptors are The rewired investor; Science- vs. human- based advice; Holistic goals- based advice. Medium Impact disruptors are Catching the retirement wave; The rising cost of risk and increasing regulation burden; New competitive patterns; Analytics and big data. Low Impact disruptors are Democratization of asset classes and strategies; The aging of advisers and transfer of wealth; The macro- environment.
According to lecture 8, which of the following is NOT one of the drivers of Wealthtech? a.Innovation b.Information asymmetry c.Social or economic environment d.Customer needs
Answer: B. Innovation, Social or economic environment, and customer needs are the drivers of Wealthtech.
Which of the following issue is NOT the incentive of Wealthtech? A. Customer needs B. Technology innovations C. The loss of customer trust since the financial crisis D. Rapid personal wealth growth
Answer: D Customer needs, Innovation and Social or Economic environment drive wealthtech
Which one of the following choices is NOT one of the features of the Wealth Management Disruptions? A. The investor who does not have too many assets is also able to do investment. B. Minimized the manual intervention needed to be given the advice of investment. C. Automatically analyze the financial position of customers and create investment strategies for them, and improve the financial knowledge for the customer. D. It analyzes the investment data of the specific investor in order to provide low-cost alternatives to investment funds to customers.
Answer: D. The four features of the Wealth Management Disruption are Lower Barriers to Invest; Provide Affordable Algorithm-Driven Services; Empower Customers; and Rely on the Crowd. In which the feature Rely on Crowd is mentioned "To leverage the capabilities that exist among the crowd to create more accurate understanding of the market and provide low-cost alternatives to investment funds to customers."
From lecture 8, which of the following are the main characteristics of WealthTech? 1.Low barriers to Invest 2.Provide affordable algorithm-driven services 3.Empower Customers 4.Rely on the crowd 5.Fulfill customer's needs and trust 6.Provide new innovations a.1,2,3,4 b.1,3,4,5 c.1,3,4,5 d.1,2,4,6
Answers: A is correct. The main characteristics of wealthtech are low barriers to invest, provide affordable algorithm-driven services, empower customers, and rely on the crowd. Fulfilling customer's needs/trust and providing new innovation is part of drivers in WealthTech
From lecture 8, "BlackRock Insights: New Technologies Changing Asset Management", which of the following is NOT the correct lesson? a.Target the "right" data and multiple data sources b.Technology is only as good as the hands it's in c.Collaboration breeds innovation d.Technologies cannot lose their potency
Answers: D is incorrect; It should be Technologies can and do lose their potency. The others are part of Blackrock's lesson
Blockchain applications in insurance are in the early stages of development, but potential use cases continue to emerge. Which of the following is not a Blockchain's potential use cases in insurance: a.Proof of Insurance b.Travel Insurance c.Consumer privacy d.Car Insurance
Correct Answer D: Car Insurance is not a Blockchain's potential use cases in insurance Incorrect Answer A: Proof of insurance - a ledger containing certificates of insurance could automate an historically paper process. Incorrect Answer B: Travel insurance - a smart contract that could collect premiums only when the smart contract is notified by the policyholder's smartphone the person is traveling. Incorrect Answer C: Consumer privacy - A blockchain for identity verification would allow health or other personal data to remain stored on a user's personal device; the blockchain would show at what time and by whom the data was accessed by. This could be applied to credit scores and insurance credit scores, thereby reducing the risk a person's information is accessed by a malicious party while in the control of a third party.
The application of InsurTech can be divided according to the steps of the insurance cycle and how technology is currently leveraged to the benefit of insurers and customers in each step.Which of the following is not a correct step ? a.InsurTech features heavily in the pre-contractual stage. b.InsurTech firms may also improve product development. c.In the post-contractual stage, InsurTech can make claims processes smoother and more convenient, reducing the costs associated with filing insurance claims. d.InsurTech may not assist back-office operations of an insurer for underwriting, risk management or regulatory compliance. e. InsurTech could improve risk control or loss assessment to reduce moral hazard after the issuance of a policy.
Correct Answer D: InsurTech may also assist back-office operations of an insurer for underwriting, risk management or regulatory compliance.
According to Lecture 8, which of the following does not define Traditional Wealth Management? a.The service is offered by different financial institutions b.It only focuses on maximizing returns c.It targets higher end customers d.Wealth management firms make money by charging fees for the service they offer
Correct Answer: B, Wealth management refers not only to maximize the return but to overseeing all financial aspects of a client, including taxes, estate and cash flow.
Which of the following is not a characteristic of Wealth Tech? a.Lower Barriers to Invest b.Provide affordable algorithm and driven services c.Empower customers d.Rely on the crowd e.None of the above
Correct Answer: E, All of them are considered to be the characteristics of Wealth Tech.
From lecture #8 class notes, which of the following is one of the main characteristics of wealth management disruptions? A. higher barriers to invest B. provide affordable customer services C. empower funders D. rely on the crowd
D.
According to "The future of wealth management revisited", which disruptor is considered high impact? a.Science-vs. human-based advice b.New competitive patterns c.Analytics and big data d.The macro-environment
Correct answer is A: Science-vs. human-based advice. With the rise of robo-advisers, new combinations of science- and human-based advisory models have emerged.Most successful robo-advisers shifted early from B2C to B2B2C models in partnerships with established broker-dealers and large advisory firms. These larger firms have been designing hybrid models that leverage advanced analytics and AI to empower advisers and improve on the manufacturing and delivery of financial advice. New competitive patterns disruptor is considered medium impact, while Analytics and big data and the macro-environment is considered low impact.
Which of the following is NOT considered an alternative data source used to project sales growth? a.Unemployment rate b.E-transaction receipts c.Online search d.GPS traffic data
Correct answer is A: unemployment rate. In order to project a retailer's sales growth, there are different sources that can be used including online transaction receipts, online search, product sales, geolocation data sources from mobile phone beacons, etc.
What does the Reply on the Crowd mean? a.Leverage the capabilities that exist among the crowd to create a wider understanding of the market and provide better alternatives to investment funds to customers b.Leverage the capabilities that exist among the crowd to create a more accurate understanding of the market and provide low-cost alternatives to investment funds to customers c.To improve the financial literacy of customers by readily providing analysis of their financial position and empowering them with tools to easily create and execute investment strategies d.To commoditize the previous high-value, manual-intensive services at a low cost via automation. This minimizes the need for manual intervention.
Correct answer is B. According to the lecture.
What is the feature that WealthTech could NOT take over human advisors? a.Space of offices b.Emotional support c.Management fees d.Training cost
Correct answer is B. Because a human advisor helps the client be emotionally stable during up and downtime of an investment plan.
What is NOT the income source of Robinhood? a.Gold subscriber fees b.Margin trading c.Overnight check deliveries d.Installing mobile app
Correct answer is D. Based on class discussion, it is free to install the Robinhood app
According to Lecture 8, what is not the Advantage of Wealthtech? a.Narrowing the gap between individual and professional investors b.Empowered individuals to steal share from traditional investment managers. c.Automates standardized activities and formerly high-value services d.Seeking a highly personalized interaction experience
Correct answer is D.Seeking a highly personalized interaction experience is the advandatage of Traditional Wealth management
From lecture 8, "Deloitte: The Future of Wealth Management", which of the following is NOT a structural trend in the wealth management industry? A. The convergence of retail banking and wealth management through advice. B. Integration of client and adviser experiences. C. Increasing adoption of holistic goal-based advice. D. None of above.
Correct answer: C. Increasing need for holistic goal-based advice is a major disruptor of the wealth management industry. However, it is not a trend discussed in the reading.
According to lecture note 8, how will wealth management disruptions transform wealth management? a.Erosion of the mass affluent market b.Revamping the value proposition of wealth managers c.Lowering bars to act as an investment expert d.All of the above
Correct answer: D. These are the main factors that change wealth management. All 3 are crucial to understanding how wealth management can drastically be affected.
What is a lesson Black Rock sites in New technologies changing asset management? A) Target the "right" data and multiple data sources B) Big data is not an answer to everything C) Algorithms can be tricked D) Models are only as good as the data they are trained on
Correct—A) this is step one and section one in the paper.
Which of the below is not considered a high impact disruptor, according to Deloitte? A) The rewired investor B) Holistic goalsbased advice C) The aging of advisers and transfer of wealth D) Science- vs. humanbased advice
Correct—C: aging of advisers and transfer or wealthy is considered low impact. Apparently few are leaving at current.
According to the article BlackRock Insights: Lesson two "Technology is only as good as the hands it's in" Which of the following statements is correct ? A. Ensure new technology is adding value to existing models B. encourage the technology we use to reveal insights about what we as investors know less about C. it is human expertise that brings technology's power to life. D. All the above
D
From lecture #8 class notes, which of the following is NOT one of the wealth management technologies? A. social trading B. market intelligence C. Robo-advisors D. none above
D
What is included in the characteristics of Wealthtech? a- Lower barriers to invest b- Provide Affordable Algorithm-Driven Services c- Empower Customers d- All of them
D
What services are included in traditional wealth management? a- Advisory b- Brokerage c- Value-add service d- All of them
D
Which following is correct about Social Trading? A. Social trading is an innovative combination of social networks and online trading B. It is based on the idea that a collective talent of experienced traders is better than the talent of a single trader C. It allows investors to view other investors' trading activities. D. All of the above.
D
According to Lecture 8, what is not the main role of Brokerage in Traditional Wealth management? a.Distribution of wealth products b.Access to rare products and assets c.Tax strategies d.Account management
The correct answer is C. Tax strategies which is relate to tax service expert.
