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The hidden secret of investment portfolios and digital wallets

September 10, 2020
Online investment portfolios and digital wallets

The hidden secret of investment portfolios and digital wallets

The democratization of online investment and stock trading

Many people these days have various assets, such as bank accounts, insurances, stocks, options, commodities, and real estate.

Thanks to a new generation of fintech companies that have made investment management and stock trading easier than ever, many people now also have stocks and investment portfolios, in addition to their other assets.
In the past, this was a privilege of wealthy individuals who used wealth management brokers to manage their investment portfolios. The new breed of fintech companies has provided an easy way for individuals to manage their own small investment portfolios, with robo-advisors and DIY fintech tools to assist with online investment management.

While this democratization of stock trading and investment is great both for the companies and the individuals who participate, it hides one big risk.


Investment management in the past and nowadays

In the past, when wealthy individuals held investment portfolios managed by wealth management companies, these companies provided a whole set of services to protect these portfolios in the case of an unforeseen event. For example, it is common for people who use wealth management companies to include in their package estate planning or trusts to protect their portfolio in case anything happens to them.

While the new generation of fintech companies make online investment and stock trading easier than ever, they don’t provide any mechanism to protect the portfolios should anything happen to the users.

Let’s put it very bluntly – if anything happens to the user, the user’s portfolio would be held by the online broker, instead of being inherited by the user’s family members.

As a friend of mine exclaimed recently during a conversation we had on the topic, “But very often, I travel with my partner. If anything happened to us, no one on this planet would know about our stocks!”

It is completely understandable that most people are overly excited by the opportunity to invest through online brokers and trading platforms and make profits – an opportunity that didn’t exist for most people just a decade ago.

But while the excitement is natural in this early stage of online investment and stock trading, more and more people have realized that they need a way to protect their investment portfolios, should anything happen to them.

Ultimately, they want to make profits not for the sake of profits but for the higher purpose of securing their families financially.

Users definitely don’t want to make great profits which ultimately go to online brokers, instead of their own families.


You are focused on profit – but who will get it?

As this question starts bothering more and more people who own complex assets, including investment portfolios and stocks, they start thinking about asset protection.

The easiest way people try to protect their assets is to catalog them, either in Google Sheets or in digital vaults. While this is better than nothing, these tools still don’t cover you in some very simple and common life situations:

  • People lose access

    It’s unrealistic to expect people to remember for decades the access you’ve shared with them. Things are even more complicated with elderly people or children. In this case, it simply doesn’t work.

  • An unforeseen event happens to the people with whom you’ve shared your access

    In this case, all your asset information is simply lost, and your assets stay in the companies which store them.

  • You don’t feel comfortable sharing access to your assets

    You might feel comfortable sharing access with your partner but not with your extended family members, for example.

  • Your beneficiaries need support

    Your beneficiaries might need support in identifying, locating, and claiming your assets. This holds true if they are young children or elderly people, if they are not financially proficient, or simply because your assets are complex or in multiple countries.

Seeing that the sharing of Excel sheets and digital vault access can’t protect their assets, many people are turning to a new generation of tech tools designed for digital inheritance.


Digital inheritance to protect investment portfolios and stocks

Digital inheritance tech tools combine a few distinctive characteristics:

  • Secure storage of asset catalogs

    Usually, data is protected through encryption and also stored in secure data centers, rather than in public clouds.

  • Ability to designate beneficiaries

    Usually, these are family members and close relatives. Typically, digital inheritance tools enable the user to choose whether the beneficiaries are to be informed about the assigned assets immediately or only in the case of an unforeseen event.

  • Mechanism for detection of an unforeseen event happening to the user

    This is a critical aspect of digital inheritance – the ability to detect whether something has happened to the user. The tools usually implement multi-step processes to ensure that such an event is detected.

  • Additional support for the beneficiaries

    As mentioned, this support is especially useful if the beneficiaries are not financially proficient, are elderly people or young children, or your assets are complex and in multiple countries.

  • Ability to notify the beneficiaries

    If an unforeseen event is detected, digital inheritance services have the ability to automatically inform the designated beneficiaries.

Digital inheritance tools ensure that your loved ones will be automatically informed about your assets so they are aware of them and can identify them.

The last is a key difference between digital inheritance tools and other alternatives. Digital inheritance ensures that notification of the assigned beneficiaries will be handled even without external intervention, while the alternative methods rely on external activity – people have to have access and proactively access the information.

With digital inheritance, in the event of anything unforeseen happening to you, your loved ones:

    • are aware of your assets
    • can identify and locate your assets
    • can minimize the chance of unclaimed assets.


Peter Minev
Co-founder of DGLegacy®, the digital legacy planning and inheritance app that protects your assets and secures your family when it matters the most. Author of the book Building TECH. Learn more: https://topstrengthener.com/about-the-book/